Buyers flocked back to Russia's battered stock markets this afternoon, sending prices soaring as trading resumed after a two-day halt and a $130 billion emergency state support package helped restore confidence.
The MICEX and RTS bourses were twice forced to call brief suspensions of trading as sharp gains exceeded technical limits. By 12.15pm, the MICEX index was up 25 per cent and the RTS index was up 20 per cent.
Some banks and energy firms soared as much as 60 per cent after authorities said they could spend up to $20 billion on buying stocks of gas monopoly Gazprom, oil major Rosneft and bank VTB to support the market and resell them at a profit in the future.
But ratings agency Standard and Poor's, which repeatedly criticised Russia for plans to spend windfall oil revenues on supporting financial markets, said it had revised the country's outlook to stable from positive.
"The outlook revision is based on growing uncertainty regarding Russia's economic policy response as the liquidity crisis in its financial markets has deepened," the agency said, adding that the economy may struggle amid a virtual closure of international capital markets.
Prime Minister Vladimir Putin told a major investment forum he would respond to the financial crisis with market measures. Russia had enough foreign exchange and gold reserves to protect its financial system and guarantee the rouble, he added.
Putin sharply criticised what he described as other states' attempts to drag Russia back to the Cold War - an apparent reference to a heavily critical speech made by U.S. Secretary of State Condoleezza Rice in Washington yesterday.
"We view all attempts to drag us back into the Cold War era as nothing less than a direct threat to Russia's modernisation project," Putin said.
Relations between Russia and the West soured last month after Moscow sent tanks to repel an attack by US ally Georgia on its breakaway region of South Ossetia.
The crisis in diplomatic relations with the West coupled with a decline in oil prices and the global financial turmoil have more than halved the value of Russian stocks since they reached a peak in May.
Top government officials and businessmen at the forum in the Black Sea resort of Sochi cheered the news from Moscow markets.
"We ask you not to leave the hall to make (stock purchase) orders. You can send them by SMS - the house rules of this forum permit that," Troika Dialog brokerage managing director Andrei Sharonov said.
Traders said the government's pledge yesterday to spend $20 billion on share purchases, cut oil sector duties by $5.5 billion, lend money to brokers and inject huge sums of cash into the banking system appeared to be working.
The Russian market surge came as global stock markets recovered strongly in response to widespread moves to tackle the financial markets crisis.