Russian shares hit 5-month high on Putin comments

Russian shares leapt to a five-month high on Tuesday after President Vladimir Putin asked the upper house of parliament to revoke Russia's right to send troops to Ukraine, where pro-Russian separatists have been fighting troops loyal to Kiev.

Vladimir Putin, Russia's president, pauses during a global business leaders summit at the St. Petersburg International Economic Forum (SPIEF)
Andrey Rudakov I Bloomberg via Getty Images
Vladimir Putin, Russia's president, pauses during a global business leaders summit at the St. Petersburg International Economic Forum (SPIEF)

The dollar-denominated RTS index rose more than 1 percent immediately after Russian news agencies reported Putin's move, citing his official spokesman Dmitry Peskov.

The index was up more than 2.5 percent on Monday's close by 1014 GMT, surpassing 1,400 points for the first time since mid-January. The rouble was up 0.7 percent against the dollar from the previous close.

Welcomed steps

The step seems certain to be welcomed by the West as a sign Moscow could be ready to help engineer a settlement in Ukraine's largely Russian-speaking east, where a pro-Russian uprising against Kiev began in April.

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Putin's spokesman said Putin's move was aimed at assisting the fledgling peace talks to end the conflict.

Ukrainian President Petro Poroshenko called it a "first practical step" following Putin's statement of support last weekend for Poroshenko's peace plan for eastern Ukraine.

March 1 resolution

Politics of Russia-Ukraine crisis 'calming': Pro
Politics of Russia-Ukraine crisis 'calming': Pro   

In the March 1 resolution, the Federation Council had granted Putin the right to "use the Russian Federation's Armed Forces on the territory of Ukraine until the social and political situation in that country normalises".

That resolution, together with Russia's annexation of Crimea from Ukraine, helped to send East-West relations to their lowest ebb since the Cold War and led the United States and Europe to impose sanctions on Moscow.

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European Union foreign ministers on Monday held out the prospect of further sanctions if Russia did not do more to support a peace process in eastern Ukraine, and also asked it to revoke the March 1 resolution.

Since then, rebels in eastern Ukraine have agreed to a temporary ceasefire to give time for peace talks in a forum where Russia is represented alongside the Kiev government and the Organisation for Security and Cooperation in Europe.