Stocks rally after Putin speech despite Crimea tensions

RUSSIAN markets rallied after a speech by President Vladimir Putin yesterday, bouncing back as he signalled an end to military aggression in Ukrainian territories.

Putin signed a draft bill in Russia’s parliament to officially annex Crimea, saying that the peninsula was an integral part of Russia, but that he had no desire to further divide Ukraine. The speech came on the same day as a shooting in Crimea in which a Ukrainian soldier died.

The Micex and RTSI indices jumped 4.06 and 3.96 per cent respectively, while spot gold – seen as a safe haven – dropped by about one per cent, to just above $1,355 per ounce. London-listed firms with exposure to Russia also gained from the speech: Ukrainian mining company Ferrexpo’s share price rose 3.65 per cent, while ITE Group jumped 2.27 per cent. Both firms saw their share prices drop sharply as the crisis unfolded earlier this month.

The potential for further conflict in Ukraine has weighed on the economic outlook in recent weeks, with several banks cutting Russia’s growth forecast in response.

Despite a relaxed market reaction, the Ukrainian military claimed that a soldier was killed in Simferopol yesterday, authorising the use of live ammunition for self defence.

Ukraine’s acting Prime Minister Arseny Yatseniuk accused Russia of a war crime over the shooting, adding that the crisis has moved from a political to a military situation.

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