High volatility has buffeted Russian markets this week. The rouble and stocks slumped as President Vladimir Putin said he had signed a decree on a partial military mobilisation, significantly escalating what Russia calls its "special military operation" in Ukraine. He also warned Moscow would respond with the might of all its vast arsenal if the West continued with what he called its "nuclear blackmail". By 1324 GMT, the rouble, which briefly sunk to its lowest since early July in the previous session, was 2.9% stronger against the dollar at 58.91, its strongest level since Aug. 19.

It had gained 2.8% to trade at 58.47 versus the euro, hitting its strongest point since July 27. It had firmed 2.7% against the yuan to 8.344, a two-month high.

"The rouble is now being driven mainly by operations related to imports and exports rather than capital flows," said SberCIB Investment Research.

The Russian currency is set to gain support from a month-end tax period that usually sees Russia's exporters convert their foreign currency earnings into roubles to pay to the treasury, the peak of which falls on Sept. 26.

The rouble has been the world's best-performing currency this year, buoyed by emergency capital controls rolled out by the central bank in a bid to halt a mass sell-off.

GAZPROM SHARES SOAR

Stocks extended their recovery, with Russia's benchmark MOEX index rebounding further from its lowest mark since Feb. 24, the day Russia sent troops into Ukraine, hit on Wednesday. Veles Capital said in a note that there may be some corrective buying though geopolitics and a hawkish U.S. Federal Reserve stoking global economic slowdown fears still hung over the market.

Gazprom shares leapt 9.3%, outperforming the wider rouble-based MOEX Russian index, which was 3.3% higher at 2,200.0 points. The dollar-denominated RTS index was up 6.3% to 1,176.6 points.

Gazprom on Thursday said it had increased its 2022 investment programme to almost 2 trillion roubles and that free cash flow would be enough to pay the 1.2 trillion due in interim dividends.

Gazprom dividends are a sensitive issue for the market, which was disappointed by a decision in June by the Russian government - Gazprom's main shareholder - not to pay dividends on last year's results.

Earlier, Gazprom shares had risen after Deputy Finance Minister Alexei Moiseev told a banking forum in Kazan that he expected the energy giant to deliver on its promise to pay. "Gazprom's shareholder meeting is now the main near-term driver for shares and the market as a whole," said BCS Express.