Russia Stocks Jump to 2-Year High as Oil Gains, Europe Woes Fade

Russian stocks advanced to their highest in more than two years as oil rallied and some investors speculated the European Central Bank may step up measures to alleviate the region’s debt crisis.

OAO Gazprom and OAO Novatek, Russia’s two largest natural gas producers, both surged by more than 4 percent. Oil producer OAO Lukoil gained 3 percent, helping push the Micex Index 2.3 percent higher to 1,601.76 by the 6:45 p.m. close in Moscow, its highest since July 2008.

Oil, Russia’s main export earner, rose as much as $1.84 to $85.95 a barrel in New York after a report showed Chinese manufacturing expanded at the fastest rate in seven months in November. Stocks in Europe gained after European Central Bank President Jean-Claude Trichet signaled yesterday that policymakers may step up their response to the fiscal crisis that has led to a surge in borrowing costs for the continent’s most indebted members.

“The oil price is rising and the dollar is going down which is helping appetite for alternative assets,” Mark Rubinstein, head of research at Metropol IFC, said in an e- mailed report. “Developments in the European debt crisis are also helping and there seems to be more specific appetite for Russia risk right now.”

OAO OGK-3, a power utility, jumped 2.8 percent to 1.72 rubles after OAO EuroSibEnergo, the energy company owned by billionaire Oleg Deripaska, offered $2 billion in cash to OAO Norilsk Nickel for its controlling stake, according to a document obtained by Bloomberg News.

Poised to Surge

Russian stocks will surge next year, sending the dollar- denominated RTS Index up 38 percent, as the country wins World Trade Organization membership and the government reduces control of the economy, according to a report by Troika Dialog today.

The RTS gauge will climb to 2,200 by the end of 2011, Kingsmill Bond, chief strategist at Troika in London, wrote in the report. Gazprom may rise 42 percent as the company ends its most “value-destructive” capital spending programs, Bond wrote.

“It’s quite feasible Gazprom could become Russia’s resource proxy for investors,” added Bond by phone.

The RTS index has climbed 11 percent this year through yesterday, compared with a 8.7 percent gain for the MSCI Emerging Markets Index. The RTS increased 2.2 percent higher to 1,632.96 in Moscow today.

All metals traded on the London Metal Exchange advanced. OAO GMK Norilsk Nickel, Russia’s biggest miner, added 1.4 percent.

To contact the reporter on this story: Jason Corcoran at Jcorcoran13@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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