Russian shares rise, traders suspect govt support

MOSCOW, Oct 21 (Reuters) - Russian shares gained for a second day on Tuesday, led by state-owned companies such as Gazprom (GAZP.MM) as traders said government money was probably already supporting the market.

Even as U.S. share indexes turned lower and the MSCI emerging markets index .MSCIEF fell 2 percent, Russia's benchmark RTS index rose 2.39 percent to 717.18 points, while the MICEX index rose 4.16 percent.

A senior government banker said on Tuesday that money from the National Wealth Fund pledged to the stock market would be deployed this week, but traders believe the government has been funding large bids in the market for several sessions already.

"The fact that everything around us is fairly negative and our market is up is unusual. It says that buyers have appeared, and you can assume it's government money," KIT Finance equity trader Alexander Bokhin said.

"If there was no state money on the market before, at this point it looks like a massive intervention on all fronts, in the banking system, and loans, and the rouble, and if the timing is right, it will bear fruit," Bokhin said.

Russia has vowed to deploy some of its accumulated oil wealth to fend off the effects of the global credit crisis on Russia's economy and financial sector.

The central bank fought to support the rouble in the face of a U.S. dollar rally as Finance Minister Alexei Kudrin warned Russia should be cautious about how it spends its substantial gold and foreign exchange reserves.

The rouble lost 14.83 kopecks against the dollar to end at 25.59 RUBUTSTN=MCX and half a kopeck against the euro to end at 35.15.

"The central bank spent about $2 billion today," a dealer from a major Western bank's local subsidiary said. Currency dealers said it was the week's first intervention.

The central bank auctioned collateral free loans for a second day, and traders said that local participants continued to support open dollar positions with the funds they received.

But the rouble remained steady at the central bank's offer level and overnight money market rates, which spiked the previous day, settled back below 10 percent RUBOND=.

Though traders said shares in government savings bank Sberbank (SBER03.MM) were supported by a large bid that likely represented state funds, it was barely changed on the day.

Energy led the stock market on Tuesday with state gas giant Gazprom (GAZP.MM) up 7.28 percent, near the top of the leaderboard.

Independent gas producer Novotek (NVTK.MM) rose 8.82 percent. Analysts have recommended gas shares as a defensive play against potentially lower oil prices because gas prices lag moves in crude prices.

The sector was underpinned by expectations that a meeting of the OPEC group of oil exporting nations would yield a decision to support prices by reducing output, a move that could help stabilise energy-dependent Russia's revenues.

Some traders say that if the stock market stabilises itself, the government may refrain from pumping state funds in, though a senior government banker said he was ready to turn on the tap.