Moscow Exchange Index Rises Over 1.5% on Geopolitical Optimism, Ruble Strengthens to 73 per Dollar
The Russian stock market opened higher after statements about a possible imminent end to the conflict. The Moscow Exchange index rose above 2,650 points, and the ruble exchange rate on the interbank market fell below 74 rubles per dollar for the first time since 2023, amid a reduction in the volume of currency purchases by the Central Bank.
The Essence: What Is Really Happening
The market is pricing in not a peace scenario, but a "no-worsening" scenario. These are fundamentally different risks. On May 10, the President of Russia stated that the end of the conflict in Ukraine is near, and in Europe, discussions about the possibility of negotiations began. The Moscow Exchange index rose by 1.3% on Monday, May 11, reaching 2,660 points, consolidating above the 2,600-2,700 level.
But the real mechanism of growth looks different from what the headlines describe. For eight consecutive weeks, the index fell, squeezing long positions to the point of pain. By May 8, the market approached with extremely oversold assets and a record share of short positions. The geopolitical signal did not act as a reason for a strategic entry—it acted as a trigger for short covering. Trading turnover on Monday amounted to less than 30 billion rubles—a pittance for a market of this size. The bulk of institutional investors simply did not participate in the move. This is a technical bounce, not a reversal.
Andrey Zatsepin from Alor Broker describes it exactly like that: "Risks did not materialize; moreover, the head of the Russian state stated that the Ukrainian conflict is close to ending... It was the warming of the geopolitical backdrop that led to the bounce, mainly due to short covering."
At the same time, the ruble on the interbank market fell below 74 rubles per dollar—a level not seen since February 2023. But this strengthening is a product not so much of geopolitical optimism as of a technical pause: the Ministry of Finance announced the resumption of currency purchases under the budget rule, but the volume turned out to be three times lower than expectations—only 110.3 billion rubles per month, or about 5.8 billion rubles per day. Taking into account parallel currency sales by the Central Bank of 4.62 billion rubles per day, the net state demand for currency amounted to just over 1 billion rubles per day. The market, which had priced in a much larger outflow of rubles, received a signal: pressure on the ruble is postponed.
Timeline and Context
April 24-27: The dollar falls from 76 to 74.62 rubles amid weak demand for currency and the approaching tax period. Experts warn: the strengthening is temporary, the Ministry of Finance is preparing to enter with purchases.
May 2: The information backdrop begins to change. On platforms like Value The Markets, the probability of a ceasefire by the end of May is estimated at only 6%. The market lives in anticipation of escalation.
May 6-7: The Moscow Exchange index falls to technical support at 2,600 points amid fears of provocations during the holidays. Investors massively reduce positions before the long weekend.
May 8 (Thursday): The Ministry of Finance officially announces the parameters of currency interventions—110.3 billion rubles until June 4, i.e., about 5.8 billion rubles per day. Analysts expected a figure three times larger. The market breathes a sigh of relief: the ruble will not go into a nosedive.
May 9 (Friday): Victory Day. Public holiday, trading closed. Fears of provocations do not materialize.
May 10 (Saturday): Information bomb. Trump announces the first significant ceasefire between Russia and Ukraine in four years of war. The President of Russia states that the end of the conflict is near. Europe begins to discuss the possibility of negotiations with Moscow.
However, sobering signals appear simultaneously: Russian Presidential Aide Ushakov states that there are no plans to extend the ceasefire after May 11. Press Secretary Peskov confirms: a peace agreement is "still very far away."
May 11 (Monday): The market opens with a gap up. The Moscow Exchange index rises by 1.3% to 2,660 points. Shares of SPB Exchange—an indicator of geopolitical sentiment—soar by 5%. Leaders of growth: oversold Gazprom (+1.9%), Severstal (+3.5%), NLMK (+2.9%), Positive Technologies (+4.3%).
May 12 (today): The market trades neutrally, the index around 2,650 points. The first impulse from geopolitical optimism has been exhausted.
Who Wins and Who Loses
Holders of oversold stocks win. On Monday, the strongest growth was not in fundamentally strong papers, but in those that suffered the most in previous weeks. Ferrous metallurgy—TMK (+4.4%), Severstal (+3.5%), NLMK (+2.9%)—a sector that is fundamentally one of the weakest: declining steel output due to falling domestic consumption, high rates, problems in the construction industry, low export profitability with a strong ruble. But they were the most oversold, and they gave the best bounce. This confirms: the move was a mechanical short covering, not a strategic purchase.
Speculators who guessed the moment win. A 1.3% rise in a day with paltry turnover is a market for intraday traders and short-term players, not for institutional portfolios.
Exporters win—partially. The ruble strengthening below 74 per dollar hits export revenues hard, but the current dynamics are more about fixing a strong ruble before the expected reversal in May-June. Alexander Baryshnikov from Record Capital notes that "during long periods of strengthening of the Russian currency, businesses increase the implementation of investment programs"—companies use the window of a strong ruble to purchase imported equipment and technologies. Tactically, this is beneficial.
Those who believed in a "market reversal" lose. This is key. Bogdan Zvarich from PSB clearly warns: "Until the market breaks above resistance at 2,720 points, it is premature to talk about a reversal, and the current rise should be considered a correction within a downtrend." Consolidation below 2,680 points leaves the market in a bearish phase.
Long-term investors who increased positions on the bounce lose. Turnover of 30 billion rubles is not an institutional entry. It is speculative froth. When it subsides, the market will return to fundamental drivers: a 14.5% rate, economic slowdown, sanctions pressure.
Retail investors who missed the ruble strengthening lose. The rate of 73-74 per dollar is the best moment to buy currency before the holiday season in the last three years. But this window may close quickly: by the end of May, Finam analysts expect the dollar at 77-78 rubles, and by the end of the year, 83-85 rubles.
What the Media Are Not Saying
The first and most important insight: US-Iran negotiations are significantly more important for the Russian market than statements about a ceasefire.
This is difficult to explain to a broad audience, but market professionals understand it: oil at $108 per barrel is the real driver that lifted the Moscow Exchange index even before the geopolitical statements. The average Urals price in April was $94.87 per barrel, significantly above the cutoff price of $59 in the budget rule. Every dollar above this price is a direct inflow of foreign currency revenue, budget stabilization, and reduced pressure on the ruble. If US-Iran negotiations finally fail, oil will remain above $100, and this will support the Russian market more than any political statements. If negotiations suddenly resume, oil will fall below $90, and geopolitical optimism will crumble faster than it appeared.
The second non-obvious point: the statements on May 10 were deliberately dosed.
Compare two messages from the same day. Trump speaks of a "significant ceasefire" and the need to extend it. Peskov simultaneously states that an agreement is "very far away," and Ushakov says that extending the regime after May 11 is not planned. This is not a disagreement—it is coordinated communication that gives the market just enough hope to trigger a technical bounce, but not so much as to launch a wave of strategic entries that would then turn into a painful fall if the truce collapses. Regulators and political communicators know that the market is oversold and give it a dosed positive. Such delicate work is not accidental.
The third insight: the resumption of purchases by the Ministry of Finance is not so much economics as a signal.
The volume of net purchases of 1.18 billion rubles per day against the backdrop of multi-billion dollar flows of export revenue is statistical noise. It is incapable of reversing the exchange rate. But it can send a signal: the state is returning to the currency market and considers the current rate below equilibrium. Mikhail Zeltser from BCS directly says: "Current levels—the dollar under 75 and the yuan under 11—look interesting for buying with a view to the future. Perhaps the exchange rates will not go much lower, but the upside potential is quite significant—by the end of 2026, they could strengthen by up to 10%." This is not just a forecast—it is an invitation to a speculative game against the ruble from one of the leading investment houses.
Forecast: Next 30 Days and 90 Days
30 Days (until mid-June 2026)
The stock market will attempt to continue corrective growth towards the 2,700-2,720 point level. Drivers: stable oil, strong dividend stories (Sberbank, VTB, Transneft preferred shares), closing of registers before the dividend season.
But resistance at 2,720 is critical. Without a breakout of this level, there is no reversal. Bogdan Zvarich's scenario from PSB—"the current rise should be considered a correction within a downtrend"—remains the baseline.
For the ruble: consolidation in the range of 74-78 per dollar. The Ministry of Finance will continue currency purchases, but their volume is insufficient for a quick reversal of the exchange rate. Alexander Potavin from Finam expects a range of 74-78 rubles for the next two months. Alfa-Forex expands the corridor to 72-78 rubles.
Key risk for the ruble: oil. If negotiations with Iran resume and Brent falls below $90, export revenue will shrink, and the ruble could move to the upper end of the range (78) as early as June.
For investors planning summer trips abroad, analysts recommend buying currency at current levels. The window of 73-74 per dollar could be the best for the entire second half of the year.
90 Days (until mid-August 2026)
The key factor is the fate of the geopolitical process.
If the ceasefire is extended or transitions into a format of regular consultations, the Moscow Exchange index could consolidate above 2,700 points by August and aim for 2,800. The dividend season (June-July) will provide an additional inflow of liquidity. But for a sustainable reversal, a fundamental shift is needed: either a reduction in the key rate below 12%, or the lifting of some sanctions, or a sustained reduction in the geopolitical premium in Russian assets. So far, none of these conditions are met.
If the ceasefire turns out to be a one-off action, as the Kremlin signals, the index risks returning to support at 2,600 points with the potential to test 2,500 in August. Without a geopolitical premium, the Russian market is valued at P/E multiples of 3-4x—this is a deep discount to emerging markets, and it will not dissipate without a real reduction in country risk.
For the ruble: by the end of summer, weakening to 80-83 per dollar is expected. Mechanism: in July, the limits for currency purchases under the budget rule could be increased multiple times, creating additional demand. The seasonal factor—rising imports and demand for currency from the population before vacations—will increase pressure. Mikhail Zeltser's target from BCS is "closer to 80 per dollar from mid-summer"; Finam's target for the end of the year is 83-85 rubles.
The main risk for the ruble in August: lifting the moratorium on the sale of foreign currency earnings by exporters or reducing the mandatory sale ratio. If the Central Bank decides to ease monetary policy in the second half of the year, the ruble could move above 85 per dollar even before September.
And the final forecast: the current bounce of the Moscow Exchange index is not even the beginning of a reversal. It is a moment when the market catches its breath before choosing a direction. The direction will be chosen not by geopolitics per se, but by oil, the Central Bank's position on the rate, and real (not stated) shifts in the sanctions regime. So far, none of these factors provide grounds for a medium-term bullish scenario.
— Editorial Team
