Russian stocks snapped a seven-day losing streak as the price of oil, the country’s biggest revenue-earner, advanced after jobless claims in the U.S. unexpectedly declined.
The Micex Index gained 0.5 percent to 1,438.91 by the 6:45 p.m. close in Moscow. OAO Gazprom, the country’s natural-gas export monopoly, gained 4.3 percent, while OAO Tatneft, an oil producer, gained 3 percent. The dollar-denominated RTS Index rose 0.5 percent to 1,544.83.
Claims for unemployment insurance payments in the U.S. last week fell to a four-month low, the Labor Department said today, tempering concern the world’s biggest economy is slowing amid a worsening European debt crisis. Crude oil advanced 0.8 percent to $83.53 a barrel after an earlier decline of as much as 2.2 percent.
“The market will remain volatile, leaning more in the direction of further declines,” Ovanes Oganisian, a strategist at Renaissance Capital in Moscow, said by phone today. Standard & Poor’s downgrade of the U.S. credit rating on Aug. 5 “set a very negative tone,” he said.
Russian economic growth slowed for a second quarter in the April-June period to 3.4 percent from a year earlier, missing the median 4 percent estimate by economists surveyed by Bloomberg. The economy may expand 4.2 percent this year, less than Nomura Holdings Inc.’s previous estimate of 4.4 percent, the bank said today.
“Downside risks to world growth have become more pronounced,” Clemens Grafe, Goldman’s Sachs Group Inc.’s chief economist in Moscow, said in a report e-mailed yesterday. There is a “high degree of uncertainty in the global oil market,” he wrote. Russia is the world’s biggest energy exporter.
Urals, Russia’s oil export blend, was at $106.41 a barrel today, down from the year’s high of $122.88, data compiled by Bloomberg show. Russia’s growth may slow to an annual 2.5 percent if oil drops to $80 a barrel, Goldman estimated.
Oil at $80 a barrel would make markets “nervous about systemic risk,” Kingsmill Bond, Moscow-based strategist at Citigroup Inc., wrote in a report.
The economy is struggling to return to pre-crisis growth rates when gross domestic product expanded 7 percent a year on average from 2000 to 2008, before contracting by 7.8 percent in 2009.
Russia “isn’t immune from negative oil price shocks which we think are likely to trigger capital flight and higher borrowing costs for Russian companies and the state,” Tatiana Orlova, an economist at Nomura in London, said by e-mail.
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