Russian Stocks Are Rising for a Second Straight Day — But Should You Trust This Rally?
2026/07/22 15:25:00
Introduction
The Moscow Exchange Index has climbed above 2,090 points after 19 consecutive weeks of decline, during which many stocks lost 30–40% of their value. The answer to investors' main question is clear: this is a technical bounce, not a trend reversal. Analysts surveyed share this view, citing BFM.ru data from July 21, 2026, which shows Brent crude trading around $91.5 per barrel and the dollar holding near 78.5 rubles.
The rally of the past two days is not driven by an inflow of new money into the economy, but by a natural correction after a prolonged sell-off. For traders and investors — including those who track the correlation between commodity markets and crypto assets — three things matter here: what is actually driving prices right now, why experts remain cautious, and which macroeconomic barriers stand in the way of a sustainable rally.
What's Driving the Rise in the Moscow Exchange Index?
The gains of the past two trading sessions are explained by a technical bounce after prolonged oversold conditions, not by the emergence of new fundamental drivers. According to BFM.ru, Sergei Suverov, investment strategist at Aricapital Management Company, notes that the stock market fell for 19 straight weeks, with many shares dropping 30–40%, making a technical correction overdue and unsurprising.
This pattern is typical after a prolonged downtrend: when prices fall too far and too fast, a gap opens between price and fair value that the market tends to partially close. That's exactly what's happening now — without the appearance of new buyers with a long-term horizon.
It's important to distinguish between a technical correction and a genuine trend reversal. A technical correction happens when the market reacts to its own oversold or overbought state and adjusts without any change in fundamentals. A trend reversal, by contrast, requires new drivers — a rate cut, easing geopolitical tension, or an inflow of fresh capital. None of these factors has materialized yet, which is why experts describe this as a technical bounce rather than a shift in the index's long-term trajectory.
For retail investors, this distinction has practical implications: buying into the current bounce in hopes the rally continues carries significantly more risk than buying during a sustained uptrend backed by fundamental change.
Oil and the Ruble: Temporary Support
The rise in Brent crude prices to around $91.5 per barrel has given the Moscow Exchange Index short-term support. At the same time, the ruble has stabilized near 78.5 to the dollar, reducing currency risk for exporters and creating a calmer backdrop for equities.
However, BCS World of Investments analyst Daniil Bolotskikh points out that geopolitics remains an unpredictable factor: oil prices could keep rising amid risks to shipping through the Strait of Hormuz and the Red Sea, or reverse just as easily if geopolitical tensions ease. That makes oil-driven support for the market more situational than structural.
Oil traditionally remains one of the biggest factors for Russian equities, since oil and gas companies make up a significant share of the Moscow Exchange Index. Rising Brent prices directly boost the expected cash flows and dividend payouts of these companies, which explains part of the current rally. But that same dependence leaves the market vulnerable to any reversal in oil prices — a scenario that looks quite plausible by autumn, given the gap between Goldman Sachs' forecasts and those of Russian analysts.
The Sberbank and VTB Dividend Factor
Expectations of reinvested dividends from Sberbank and VTB are the only genuinely significant source of "new money" likely to enter the market in the coming weeks. Sberbank is due to pay shareholders in early August, and part of that payout — estimated at 100–200 billion rubles — could theoretically flow back into the market as stock purchases.
That's a substantial sum for the Russian market, but it's limited in size and a one-time event. If the dividend money does flow back into stocks, analysts allow that the current rally could evolve into something more durable. For now, though, that remains an assumption rather than a confirmed fact.
The key question for August is what share of the paid-out dividends will actually go toward buying new stock, as opposed to being moved into deposits or bonds. With the key rate still at 14.25%, a significant portion of shareholders may prefer conservative fixed-income instruments over reinvesting in a volatile stock market. That makes the dividend factor a potential — but far from guaranteed — driver of growth.
Why Don't Experts See a Trend Reversal?
The main reason for experts' caution is three macroeconomic factors that continue to weigh on the market more heavily than any local positive drivers: the central bank's tight monetary policy, rising inflation expectations among the population, and a structural liquidity shortage in the banking sector.
It's the combination of these factors — not isolated positive headlines about oil or dividends — that determines the index's medium-term trajectory. Until at least one of these barriers is removed, analysts aren't ready to call this a trend change.
Tight Central Bank Policy and Rising Inflation Expectations
Russians' inflation expectations have hit their highest level in nearly a year, making monetary easing unlikely in the near term. The Bank of Russia will make its key rate decision this coming Friday, and most market participants expect the rate to be held at 14.25%, though a cut to 14% isn't ruled out — it just looks like the less likely scenario.
A high key rate makes deposits and bonds far more attractive than stocks on a risk-adjusted basis. As long as investors can earn double-digit returns with virtually no risk, demand for riskier assets like equities will stay limited.
Some analysts allow for a cut to 14% at the upcoming meeting but acknowledge that such a move would be harder to justify given rising inflation expectations. The baseline forecast for year-end points to a key rate around 13.75% — still well above historical norms and enough to keep capital parked in conservative instruments. As long as the gap between deposit yields and potential stock returns stays this wide, a mass rotation of capital into equities looks unlikely.
Banking Sector Liquidity Shortage Hits a Record High
The structural liquidity deficit in Russia's banking sector has reached 2.41 trillion rubles — the highest level since March 2022. That means banks simply don't have enough free funds to channel into the stock market and drive prices higher.
The shortage is being created from several directions at once. This summer saw a sharp rise in household cash withdrawals — amid the vacation season and internet disruptions, more than 500 billion rubles may have left the system in July alone. At the same time, the Finance Ministry is actively issuing federal bonds, and the central bank is absorbing funds through its own instruments, further draining free liquidity from the system. Banks themselves have been forced to borrow more than 5.5 trillion rubles from the regulator through repo operations, confirming just how short the system is on "long money."
Without a fresh inflow of liquidity into the banking sector, talk of a sustained equity rally is premature — even good news on oil and dividends can't offset a structural capital shortage.
The liquidity deficit affects the stock market through two channels. First, banks facing a funding shortage cut back on lending to brokers and margin financing, limiting investors' ability to build leveraged positions. Second, institutional investors, including banks themselves, prefer to direct their limited resources toward the most liquid and predictable instruments — government bonds and central bank deposits — rather than equities. As long as the structural deficit stays at record levels, these two channels will keep holding back any potential market rally.
What's the Fair Value of the Moscow Exchange Index?
According to BCS World of Investments analysts, the fair value of the Moscow Exchange Index currently sits in a range of 2,500–2,700 points excluding dividends, to which a roughly 11% dividend yield over a 12-month horizon can be added. That's above current levels, but experts don't believe the market will get there quickly without a rate cut.
The table below summarizes the key figures as of July 21, 2026, to illustrate the balance between short-term drivers and long-term risks.
| Indicator | Current Value | Year-End Estimate |
| Moscow Exchange Index | above 2,090 points | fair-value range of 2,500–2,700 |
| Brent crude | around $91.5/barrel | conservative forecast of ~$75/barrel |
| USD/RUB rate | around 78.5 rubles | expected to weaken to 80–84 rubles |
| Central bank key rate | 14.25% | forecast around 13.75% |
| Bank liquidity deficit | 2.41 trillion rubles | highest since March 2022 |
The Long-Term Outlook for Oil and the Ruble
Analysts' long-term oil forecasts diverge sharply from today's more optimistic scenarios. While Goldman Sachs allows for Brent to climb to $120 per barrel by the fourth quarter if supply risks through the Strait of Hormuz persist, Russian analysts' base case points to prices falling back toward $75 per barrel by year-end.
A similar uncertainty surrounds the ruble. The currency is expected to keep gradually weakening as the Finance Ministry buys foreign currency under its budget rule, with the exchange rate potentially reaching 80–84 rubles per dollar by year-end. Both scenarios — for oil and for the ruble — point to a deterioration in external conditions for equities by autumn, further limiting the potential for a sustained rally.
For investors, this means a long-term strategy can't be built solely on today's favorable oil prices and stable ruble. Both factors could reverse within a few months, and the stock market — sensitive to commodity conditions — would respond accordingly. Diversifying across several scenarios, from an optimistic Brent rally to $120 to a conservative decline toward $75, remains a sensible approach to assessing risk over the coming quarters.
Should You Trade Russia-Linked Assets on KuCoin?
The volatility triggered by conflicting signals — a technical stock rebound set against tight central bank policy and a liquidity shortage — creates conditions where traders often turn to crypto derivatives as an alternative way to express a view on macroeconomic trends. On KuCoin, investors can track the correlation between oil prices, the dollar exchange rate, and stablecoin dynamics, and use futures to hedge risks tied to commodity and currency swings.
Before opening any positions, it's worth soberly weighing the risks: Russia's macroeconomic picture remains uncertain, rates are high, and liquidity is limited, so sharp moves are possible in either direction. KuCoin offers tools — spot trading, futures, and market analytics — that let traders respond flexibly to situations like this one, but the final decision to open a position should always be based on your own analysis and risk tolerance.
Those looking to get started should review current market data on the KuCoin platform, set alerts at key levels, and use moderate position sizing given the heightened volatility of the current situation.
A practical approach for traders following stories like this one involves a few steps. Start by noting the key reference points — the current Brent price, the USD/RUB range, and the central bank's rate decision — as benchmarks for further analysis. From there, KuCoin's spot and futures instruments can be used to build positions correlated with these macro variables, whether through commodity-linked tokens, stablecoins, or broader market indicators. Finally, it's important to revisit positions regularly as new data comes in — from central bank decisions to banking-sector liquidity figures — since it's these numbers, not short-term headlines, that determine the medium-term direction of related markets.
Conclusion
The Moscow Exchange Index's rise above 2,090 points over two trading sessions is a technical bounce after 19 straight weeks of decline, not the start of a new bull run. Short-term support for the market comes from higher Brent prices, a stabilized ruble, and expectations that 100–200 billion rubles in Sberbank and VTB dividends will be reinvested.
However, three structural factors rule out talk of a reversal: the central bank's tight policy amid rising inflation expectations, the likely continuation of the 14.25% key rate, and a banking-sector liquidity deficit of 2.41 trillion rubles — the highest since 2022. Analysts' fair-value estimate for the index sits in the 2,500–2,700 point range, but reaching that level will take time and a rate cut. Long-term forecasts for oil and the ruble also point to potentially worsening conditions by autumn. Investors should treat the current rally as an opportunity for tactical decisions, not a signal to change strategy.
Frequently Asked Questions
1. How many consecutive weeks did the Russian stock market fall before this bounce?
The stock market fell for 19 consecutive weeks, during which many shares lost 30–40% of their value, setting the stage for a technical correction.
2. When will the Bank of Russia decide on the key rate?
The key rate decision is due this coming Friday, and most analysts expect it to be held at 14.25%.
3. How large is the liquidity deficit in Russia's banking sector?
The structural liquidity deficit in the banking sector has reached 2.41 trillion rubles — the highest level since March 2022, according to central bank data.
4. How much in dividends could flow back into the market after Sberbank and VTB payouts?
Analysts estimate the potential volume of reinvested dividends at 100–200 billion rubles, which could provide additional support for stock prices in August.
5. Where could the dollar-ruble exchange rate be by year-end?
Analysts forecast the dollar could gradually rise to 80–84 rubles as the Finance Ministry buys currency under its budget rule and oil prices stabilize closer to $75 per barrel.