Russia's Stock Exchange Suspends for Second Time in a Day

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Russian stock exchanges halted trading Friday after stocks shot higher, rebounding off a two-day closure amid a financial crisis as the government rushed through emergency measures that included more money for banks and purchases of shares to stem plunging prices.

Exchanges suspended trading for a second time in just several hours of trading Friday after shares on the benchmark RTS and MICEX surged by 20 percent and 26.3 percent, respectively. Trading was to resume later in the day.

Stocks bounced back after the government rushed through a series of emergency measures — amounting to some $120 billion worth of relief — in the shape of increased liquidity to the banking sector and share purchases on the domestic markets.

The Central Bank made available $15.76 billion in daily "repo" auctions Friday, considerably more that the about $6 billion that banks borrowed. There was to be a second auction later in the day.

The stock-markets surge came amid a global recovery in markets Friday after the U.S. took steps to limit damage from a seize-up in world credit markets following the forced private sale or government takeover in recent days of Wall Street institutions such as Lehman Brothers Holding Inc. and American International Group.

The dollar-denominated RTS halted trading for a second time Friday after suspending trade in several stocks — including Lukoil, which jumped by nearly 20 percent. Shares in state-controlled bank VTB and state-controlled oil company Rosneft jumped by 60 percent and 45 percent, respectively, on MICEX before trading was suspended.

"I expect a very athletic time for the next few days to few weeks," said Eric Kraus, an adviser to Otkrytie brokerage. "Falling and rising in great percentages is to be expected."

Trading was to resume at 2:55 p.m. (1055GMT) but was delayed until 4:15 p.m. (1215GMT). MICEX, shut down at 2:15 p.m. (1015 GMT), is also to reopen then.

Normal trading on both indexes was closed down on Wednesday after the MICEX suffered one-day losses on a scale not seen since Russia's 1998 financial collapse. It plunged 25 percent in just 2 1/2 days on the back of tumbling oil prices and Wall Street turmoil, and was down more than 55 percent since its May peak.

Although initially seen as slow to act, the government stepped in to reassure investors and head off the possibility of a wider loss of confidence spreading to the population.

Speaking at an investors' meeting in the Black Sea resort of Sochi, Prime Minister Vladimir Putin tried to soothe the foreign investors' fears in an effort to attract some of the world's swiftly draining pool of investment capital.

Putin assured investors that, because of Russia's huge foreign-exchange reserves and other surpluses, Moscow could still balance the budget for the next three years even if oil drops to between $40 and $50 a barrel. Oil has fallen below $100 after reaching a record $147 a barrel in July.

Despite assurances from the government, however, it may take longer for the wounds to heal, after investors suffered huge losses on the Russian stock markets.

"People were skinned alive," said James Fenkner, managing director at Red Star Asset Management. "They got creamed ... It's going to be a while before they come back."