Putin Flip-Flops on Ukraine Imply Brief Bounce: Chart of the Day

President Vladimir Putin’s soothing words on Ukraine have handed Russian stocks only fleeting respite of late. The jury’s out on his most recent remarks.

The CHART OF THE DAY shows how surges in Russia’s Micex Index of stocks after conciliatory statements by Putin quickly reversed as promises to de-escalate tensions in Ukraine were broken. The Russian leader last week showed some support for Ukraine’s May 25 presidential vote, in comments Polish Prime Minister Donald Tusk said would be “rather naive” to take optimistically.

“No one really knows what the ultimate aims are, so any indications in one direction or another are taken at face value to start with, given assets are so depressed,” said Simon Quijano-Evans, head of emerging-market research at Commerzbank AG in London. After Putin’s latest remarks, investors must “wait and see with a cautious eye as the risk of misunderstandings and mistrust are that much higher now.”

Russia has clashed with its former Cold War foes over Ukraine, triggering sanctions from the U.S. and the European Union and sending the ruble-denominated Micex down 8.6 percent this year, compared with a 1.2 percent gain in the MSCI Emerging Markets Index, data compiled by Bloomberg show.

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