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Protest worries weigh on Russia markets after Putin win

The rouble was unmoved and gains for share priced were held firmly in check by concerns over the outcome of protests against the result set for later in the day.

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Russian stock markets rose after Vladimir Putin's outright victory in presidential elections on Sunday, but the rouble was unmoved and gains for share priced were held firmly in check by concerns over the outcome of protests against the result set for later in the day.

Stock markets remain near a seven-month high but players are wary of new bets ahead of the street protests that are symbolic of the emergence of a new wave of opposition in Russia due to anger over widely-reported election fraud in a Dec. 4 parliamentary vote and Putin's dominance of politics.   

The rouble was virtually unchanged, while yields of Russia's Eurobonds declined, reflecting globally improving risk appetite.   

On the stock market, the rouble-traded MICEX index rose 0.9 percent to 1622.3 points by 0700 GMT after briefly touching its highest since early August of 1,629.5. Its dollar-traded peer RTS was 1.2 percent higher at 1,774.8 points.

Preliminary results, with nearly 100 percent of the votes counted, gave Putin almost 64 percent of the votes, well above the 50 percent needed for a first round win.    

"I would not be surprised if there is a bit of a market rally on Monday but that will soon abate if there are either big protests or credible evidence of irregularities," said Liam Halligan, chief economist at fund manager Prosperity Capital Management.

"Obviously if there is violence the markets will react badly, but even if there are peaceful protests they are always portrayed internationally as being not so."

The rouble traded broadly flat at 29.28 against the dollar and 38.67 against the euro.   

Versus the euro-dollar basket, the central bank's main gauge of the currency market, it stood at 33.50 by 0700 GMT, retaining support from oil prices that hovered close to $124 per barrel, $24 above an average price factored into Russia's 2012 budget.

The bond market showed investors' interest in increasing exposure to Russia as yields of its benchmark Eurobond, maturing in 2030, fell to 3.97 percent, its lowest since November 2010.

"I think it is premature to make conclusions how the election affected Eurobond prices. In general, political events happened on the backdrop of improving confidence on global financial markets," said Alexei Demkin, head of fixed income research at Gazprombank.

Demkin also said that not only the nominal price and the yield reflect perception of Russia's risks, but also a spread over US 10-year Treasuries which now stands at around 200 points compared to less than 90 points, seen in 2007.

Russia may tap the Eurobond market later this month, planning to raise abroad around $7 billion in the whole of 2012.

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