In sharp contrast to other opposition demonstrations in past months, which were broken up by baton-wielding riot police, Saturday's march was allowed by the authorities.
Police kept a low profile apart from a helicopter buzzing overhead.
"The authorities didn't want to ban the protest during the forum," Garry Kasparov, world chess champion turned opposition leader, said.
Business showcase
The Russian government organised the St Petersburg International Economic Forum to show off the country's economic might and calm investors' nerves after months of political and diplomatic sniping with the West.
Officials kept the demonstrators' route well away from the heavily guarded Lenexpo conference centre where around 6,000 business leaders, diplomats and presidents were attending the St Petersburg International Economic Forum.
In St Petersburg, Putin urged Western firms
to invest in the Russian economy [AFP]
Inside the conference centre, Putin urged managers of leading Western companies to seize investment opportunities in Russia and promised fair play in return.
He reeled off investment figures to 100 Western CEOs. "There is altogether $150 billion of foreign investment in Russia," he said.
"Data provided by international organisations puts Russian investment abroad at $138bn. According to our estimates the figure is at least $140bn.
"This shows that the Russian economy is gradually but confidently integrating into the world economy."
Free energy market
Putin told delegates that Russia had a free energy market and was not planning to monopolise the economy.
"The openness of our energy market is much greater than that of other major world energy producers," he said, and noted that in Opec countries everything was owned by the state.
Putin said the creation of major state holding companies in aviation and shipbuilding did not mean the re-creation of state capitalism.
He said: "We are only bringing together something which already belongs to the state but has so far worked ineffectively."
Ex-adviser's warning
Andrei Illarionov, who served as an economic adviser to Putin before resigning to join the opposition last year, advised those at the forum to think again about participating.
"Businessmen," he said in a speech to the crowd. "If you want to help Russia to become stronger and better come to our march instead of going to the Forum."
Addressing the same theme, Kasparov said: "We want investment to be protected and this regime in general lies. They start negotiations instead of transparency, so they need reform as much as we do."