Russia’s dollar-denominated stock index rose about 15 percent this year as high oil prices outweighed growing political risk.
The RTS Index rallied as much as 38 percent in 2021, touching a 10-year high of 1,900 in October, lifted by oil prices, which gained by more than half this year as global economies reopened.
Oil is Russia’s biggest export, while oil companies account for a significant percentage of the RTS index.
However, Russian stocks pulled back about 15 percent from their October highs to close the year just shy of 1,600 following a Russian military buildup on the border of Ukraine that sparked fears of an invasion.
The United States and Europe have warned Russia it faces massive economic sanctions if it invades Ukraine, spooking some investors.
Russia’s stock market was also impacted late in the year by U.S. Federal Reserve comments that it could raise interest rates in 2022.
U.S. rate increases make riskier assets like emerging market stocks and bonds less attractive.
Russia’s ruble closed the year nearly flat at around 75 to the dollar.
The ruble strengthened to 69 in October on high oil prices, but retreated along with Russian stocks amid the Kremlin’s growing standoff with the West.
Nonetheless, Russia’s stock market and currency performed better than some of their emerging market peers.
Turkey’s lira is set to end the year down about 43 percent.
Meanwhile, the broader emerging market index is on track to close about 4.5 percent lower due in large part to China’s crackdown on its largest tech companies.
However, the RTS Index’s advance still trails the U.S. benchmark S&P 500, which is on pace to close the year 25 percent higher.