Russian Stocks Rise, Led by Lukoil, as Oil Climbs Above $60

Russian stocks advanced, with the RTS Index ending two days of declines. OAO Lukoil, the country's largest crude oil producer, led the gains as oil rose from a seven-month low to surpass $60 a barrel.

OAO OGK-5, a Russian power generator, advanced as it plans to sell as much as 14.4 percent of its shares in a public offering.

The dollar-based Russian Trading System Index gained 2.7 percent to 1561.8 as of 5:25 p.m. in Moscow, erasing its 2.3 percent decline in the previous two days. The ruble-denominated Micex Index rose 3.5 percent to 1385.27.

Lukoil climbed 4.3 percent to $74.55. The shares lost 7.3 percent in the previous four sessions. OAO Gazprom, the world's largest natural-gas producer, advanced 1.8 percent to $11.05.

Crude oil for November delivery increased 2 percent to $60.57 a barrel on the New York Mercantile Exchange on speculation that the Organization of Petroleum Exporting Countries may reduce output to halt a decline in prices.

``A rebound in oil led to positive sentiment on the Russian market, which is strongly dependent on the oil price,'' said Serge Skvortsov, who manages $130 million at FMC Advisors in Moscow.

Russia is the world's second-largest oil producer behind Saudi Arabia, and energy producers make up about half of the RTS Index weighting.

Preferred shares of OAO Transneft, Russia's oil pipeline monopoly, surged 7 percent to $2,130. The company's common stock doesn't trade. Second-quarter profit rose 35 percent to 16.5 billion rubles ($616 million), the company reported Oct. 3. Sales increased 17 percent to 50.5 billion rubles.

OGK-5 Advances

Shares of OGK-5, a power generating subsidiary of the national utility OAO Unified Energy System, advanced 3 percent to 2.39 rubles on the Micex. OGK-5 is offering as many as 5.1 billion shares in Russia and abroad and will use the money raised to invest in equipment, the Moscow-based company said Oct. 3, without giving a price range.

The OGK-5 shares that trade now are in private hands as a result of the selective state asset sales Russia carried out in the 1990s. The company has never sought to raise money by selling stock in a public offering.

Shares of OGK-3, another one of six wholesale thermal power companies set up as part of Unified Energy's breakup, advanced 2.4 percent to 2.18 rubles on Micex.

Unified Energy shares rose 1.6 percent to 19.862 rubles.

Russia's Biggest Miner

OAO GMK Norilsk Nickel, Russia's biggest mining company, gained 5.4 percent to 3,447 rubles. Copper, which generates about a fifth of Norilsk's revenue, rose from a three-month low in London on speculation that demand for the metal will exceed supply. A price rally in commodities will continue this quarter, driven by purchases from China, the world's largest consumer of most industrial metals, Morgan Stanley said today.

Separately, Norilsk, which is the world's largest nickel and palladium producer, may report first-half earnings tomorrow, Credit Suisse Group wrote in a report today.

``We expect the numbers to come in strong, mainly on the back of high metals prices,'' Semyon Mironov, an analyst at Credit Suisse in London, wrote in the report.

Nickel prices jumped 58 percent in the first half of the year. Copper gained 67 percent over the period.

OAO Severstal, Russia's biggest steel producer by sales, climbed 2.3 percent to 320.5 rubles on the Micex. Anglo American Plc, the world's second-biggest mining company, and Severstal said they have formed a venture to jointly explore for nickel, copper and zinc in Russia, London-based Anglo said today in a statement.

Shares of OAO Chelyabinsk Zinc Factory advanced 1.6 percent to $118.90 on the RTS. The owners of Russia's largest zinc producer plan to raise as much as $250 million in an initial public offering in London in November, according to a marketing document for the sale.

To contact the reporter on this story: Maria Ermakova in Moscow at mermakova@bloomberg.net.

To contact the editor responsible for this story: Balduin Hesse in London at bhesse2@bloomberg.net.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.