Severe restrictions on trade on Thursday underscored Russia’s economic isolation and strain on the financial system despite central bank efforts to stem falling markets. Foreigners couldn’t sell and traders were banned from short selling – or betting prices would plummet – as the government said it would spend $10bn on stocks in the coming months, a move that should support prices.

Russian stocks were a small part of emerging market stock indices even before the war and only for those with high risk tolerance, given the extensive cronyism, non-transparent accounting and interference widespread state. They lost any remaining interest they had in foreign investors when the Moscow Stock Exchange was dubbed “uninvestable” about a week into the war.

Tim Ash, senior sovereign emerging markets strategist at BlueBay Asset Management, said the reopening of trading was “deeply managed” and suggested that “for Russians with a bit of cash in reserve, there is no nothing else to buy as a hedge against inflation and collapsing currencies”.

The benchmark MOEX gained 4.3% as some companies partially recouped losses from the plunge on the day of the invasion. Airline Aeroflot bucked the positive trend, losing 16.4% – no surprise after the United States, European Union and others banned Russian planes from their airspaces.

A US official called the severely restricted market a “charade”, with just a few publicly traded stocks and Russia making it clear that it would “invest government resources to artificially support the shares of trading companies”.

“It’s not a real market or a sustainable model, which only underscores Russia’s isolation from the global financial system,” said Daleep Singh, deputy national security and economic adviser. of President Joe Biden, in a statement.

Restrictions such as shutting down and restricting the stock market are among those Russia has taken to protect the financial system from total collapse, but they also close the economy to trade and investment that could fuel growth.

Economic turmoil in Russia due to sanctions and war has been severe. Hundreds of American, European and Japanese companies have withdrawn from Russia. There have been bank runs and panic buying of sugar and other commodities. The Russian ruble exchange rate fell.

Outside of Russia, the reopening of stock markets on the Moscow Stock Exchange has little impact. Its market capitalization is a fraction of that of major Western or Asian markets. Additionally, foreigners are not allowed to sell stocks under rules imposed to counter Western sanctions.

The Moscow exchange had a market capitalization of around $773 billion at the end of last year, according to the World Federation of Exchanges. This is dwarfed by the New York Stock Exchange, where the total of all stocks is around $28 trillion.

The central bank estimates that around 7.7 trillion rubles, or $79 billion, of Russian stocks belonged to retail investors at the end of 2021.

The shares were last traded in Moscow on February 25, a day after the MOEX fell 33% after Russian forces invaded Ukraine. Russia resumed trading in ruble-denominated government bonds earlier this week.

Before the war, the market was primarily for funds investing in emerging market equities. About a week after the dispute began, Russia was removed from the emerging market indices compiled by MSCI, a division of Morgan Stanley. MCSI said that after consulting with a large number of asset managers, it determined that the Russian stock market was “uninvestable”. This removed a primary incentive for fund managers to invest there.

On March 3, the London Stock Exchange suspended trading in the shares of 27 companies with ties to Russia, including some of the largest in the energy and financial sectors. The shares lost most of their value before the suspension.

Shares of Rosneft fell from $7.91 on February 16 to 60 cents on March 2. Sberbank plunged from $14.90 to 5 cents.