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MOSCOW (Reuters) -- Buyers have flocked back to Russia's battered stock markets, 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 1115 GMT, the MICEX index was up 25 percent and the RTS index was up 20 percent.

Some banks and energy firms soared as much as 60 percent 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 criticized 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 ruble, he added.

Putin sharply criticized 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 on September 18.

"We view all attempts to drag us back into the Cold War era as nothing less than a direct threat to Russia's modernization project," Putin said.

Relations between Russia and the West soured last month after Moscow sent tanks to repel an attack by U.S. 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.

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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 on September 18 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.

"We are gapping higher thanks to the recovery in world stock markets, the liquidity injection into our system, and the tax cuts," said Aleksandr Razuvayev, head of market analysis at Sobin Bank.

"I think we will have a jump higher and then a consolidation around the 1,300-1,500 level [on RTS] as long as there is no crash in the United States."

As stocks recovered, the markets watchdog said it would study whether to lift a ban on some operations, which it previously blamed for the market slump. Those included margin trading, when investors borrow money from the broker, and short selling, or bets on a fall in an asset's price.

Despite its strong economic fundamentals, Russia has been among the emerging markets hardest hit by the fallout from the global financial crisis.

Analysts estimate investors have pulled about $36 billion from Russia since early August.

Foreign fund investors, though attracted by Russia's fast-growing economy and its huge reserves, remain nervous about the country's poor image in the West.

"Some people back home think this place is one notch above North Korea," said one U.S. fund manager visiting Moscow. "It's tough to bet against that."

But confidence seemed to be gradually returning across the board with money-market rates falling further to 7.5-8.0 percent from the weekly record of 10.5 percent and demand at the Central Bank's repo auction below peak levels.

Yields on Russia's benchmark 2030 Eurobond also improved from their highest levels in 3 1/2 years, falling by 276 basis points on September 19. The ruble was stable at 30.35 versus the euro-dollar basket.
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