Russian leaders: Bad election result is proof of democracy

Putin himself added: "This is an optimal result, which reflects the real situation in the country ... Based on this result, we can guarantee the stable development of our country."

United Russia won 49.5 percent of votes in the Russian Duma based on 96 percent of ballots counted compared to over 64 percent last time around in 2007.

The Communist Party almost doubled its vote from 12 percent to 20 percent. Just Russia - a former United Russia ally - won 14 percent. The far-right LDPR climbed to 13 percent, leaving the liberal Yabloko faction struggling to pass the Duma threshold.

Outside commentators - such as the Liberal group in the European Parliament - condemned the election as a sham even before it took place. Most independent parties were not allowed to register and Russia declined to let in the normal complement of international monitors.

Complaints also flooded in on the day. Independent Russian monitoring group Golos said its website was hacked and its staff were kept out of polling stations. YouTube users posted videos of pens in ballot stations filled with invisible ink, pre-stuffed ballot boxes and buses full of people travelling from place to place to vote multiple times.

Opposition politician Boris Nemstov said: "We cannot even call them elections. It is the theft of votes from the Russian people."

Some analysts said the result shows an important change of mood in Russian society. Opposition politician Vladimir Ryzhkov called it "a collapse in trust in Putin" and predicted "an even bigger political crisis" when Putin runs for president in March. Moscow Carnegie Center analyst Masha Lipman told Reuters: "It's a sign of defiance ... The government has turned this election into a farce and in response people are turning their electoral choice into a travesty."

With oil prices (the main prop of the Russian economy) riding high and with Putin's security services at full strength (some 50,000 police kept watch in central Moscow on Sunday), the financial world voiced confidence that Putin is here to stay, however.

"Many politicians have been thrown out of their offices throughout the world following the [financial] crisis, while United Russia managed to keep the majority in the parliament," Prosperity Capital chief Mattias Westman told Bloomberg from London.

"United Russia has given us stability for two terms and we will get a third term of stability," Quesnell Capital's Ian McCall said from Geneva.

Investment houses noted that shares in Russia's state-owned gas monopoly are "cheap" at the current price. Some also changed their rating for the state-owned oil firm Lukoil from "hold" to "buy."