Russian Stocks Extend Longest Rally on Earnings, Fed Outlook

Russian stocks extended the longest rally since June after OAO Sberbank posted better-than-estimated earnings and the Federal Reserve Chairman Ben S. Bernanke said the U.S. may buy more bonds, spurring investor appetite for riskier assets.

The Micex Index rose for a fifth day, adding 1.4 percent to 1,672.57 as of 6:45 p.m. in Moscow trading. Sberbank, whose common shares make up 13 percent of the Micex, added 2.6 percent on a 10-fold increase in third-quarter profit. OAO Gazprom, the natural gas export monopoly, added 1.7 percent and OAO Lukoil, the second-largest oil company, jumped 2 percent as crude traded near a 26-month high.

Fed purchases of Treasuries beyond the $600 billion announced are “possible” given that U.S. unemployment may take five years to fall to a normal level, Bernanke said, helping quell investor concern after an unexpected gain in the jobless rate last month. Oil, Russia’s main export earner, gained as much as 0.6 percent to $89.73 in New York.

“Crude is almost at $90 which is helping Russia,” John Heisel, a sales trader at Citigroup Inc., said by telephone in Moscow.

Sberbank, Russia’s biggest lender, climbed to 105.71 rubles, its highest close in almost three years, after the bank said net income rose to 45.8 billion rubles ($1.46 billion) from 4.25 billion a year earlier.

That beat an average estimate of 36.3 billion rubles from 10 analysts surveyed by Bloomberg. Alfa Bank analysts Jason Hurwitz and Leyla Sharifullina said the earnings were 20 percent above their forecast and 16 percent above consensus, according to an e-mailed report today.

X5 Retail Group NV rose to its highest level on record after the Russian supermarket chain agreed to buy its smaller rival Kopeyka for 51.5 billion rubles ($1.6 billion). The stock surged 6.8 percent to $44 by 4 p.m. in London trading, headed for its biggest gain since May and its strongest close since Bloomberg started tracking the shares in May 2005.

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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