Russia to launch stock market support next week: PM

MOSCOW (Reuters) - Russia will spend 175 billion rubles ($6.7 billion) on stock in Russian companies this year and the next to support share prices, Prime Minister Vladimir Putin said on Friday.

"Development Bank will start placing funds in Russian shares, not foreign shares, next week," Putin told reporters.

"The amount to be placed is up to 175 billion rubles this year, and no less than 175 billion rubles next year," he added.

State controlled Development Bank, known in Russian as Vneshekonombank (VEB), will be the government's agent in carrying out the support package, Putin said. Putin is Development Bank's chairman.

The bank will also receive a 75 billion ruble capital injection by the end of the year, which could ultimately be used for either share or corporate bond purchases, Putin said.

Share trade was closed in Moscow as the market regulator tried to contain a sell-off on Russia's liquidity-deprived stock market, but Russian shares trading as depositary receipts declined despite the promise of support.

The FTSE Russia index, trading near 465 points before the announcement, briefly pared losses on the news but settled back down to 458.84, a 12.31 percent loss, by 1202 GMT.

Russia initially pledged 500 million rubles in support for the stock market. The Russian government has said it would buy shares in state companies, increasing its stakes.

(Reporting by Denis Dyomkin, writing by Melissa Akin; Editing by David Cowell)