Russia's stock market has held another rally today, and is (nearly) at its highest point since the Yanukovych government in Ukraine was toppled. Bloomberg reports:

Gazprom added 1.6 percent and the Micex rose the most since May 19 after Morgan Stanley upgraded the shares on optimism the election of Petro Poroshenko as president of Ukraine will ease tension between the two nations. Poroshenko’s win is an “important step” toward de-escalation in Ukraine and Russian stocks will rise as further steps are made to resolve the standoff, Morgan Stanley said in an e-mailed note.

The chart tells the tale.

While the MICEX is still down 3.67% since the start of the year, it has recovered 85.4% of the value it lost between the fall of the Yanukovych government and its lowest point on March 14, right before the Crimean referendum.

The markets reacted poorly when they believed that Putin was driving Russia towards war. Now Putin is seen by investors as deescalating the crisis. With Russian-made anti-aircraft missiles knocking Ukrainian aircraft out of the sky, and with well-armed separatists still in control of large parts of eastern Ukraine, one has to wonder if Putin is really being rewarded by the markets for being more subtle. If sanctions were designed to halt a major Russian invasion, they may have worked for now, but if sanctions were designed to bring stability to Ukraine, one has to wonder whether deescalation is simply a Pyrrhic victory.

