Russia Stocks Erase Losses, Climb on China Aid for Europe Wagers
Russian stocks erased losses and climbed a second day as bets China may still offer support to ease Europe’s debt burden lifted appetite for riskier stocks.
The 30-stock Micex Index advanced 0.5 percent to 1,504.92 by the 6:45 p.m. close in Moscow, paring an earlier gain of as much as 1.5 percent. OAO Gazprom, Russia’s natural gas export monopoly, jumped 1.4 percent. VTB Group, Russia’s second-biggest lender, rose 2.9 percent. OAO Magnit, the nation’s largest food retailer by market value, surged 4.1 percent. The dollar- denominated RTS Index slipped 0.1 percent to 1,570.38.
Stocks in Europe rebounded on speculation Germany and France will confirm support for Greece and after Caijing magazine reported China is willing to buy the bonds of nations hit by the debt crisis, citing Zhang Xiaoqiang, a vice chairman of the National Development and Reform Commission.
“The bounce today is just another bear market rally,” Dmitry Malykhin, chief investment officer at Moscow-based hedge fund Da Vinci Capital, said by phone today. “We prefer to keep our cash on the sidelines because it could be a bonaza for us if things get to distressed levels like in 2008.”
Stocks in Russia have slumped 9.7 percent so far this quarter as fears the U.S. economic recovery is stalling and the European debt crisis is spreading sapped demand for emerging- market assets. The MSCI Emerging Markets Index has slumped 17 percent over the same period.
The Micex has lost 11 percent in 2011 and trades at 5.6 times analysts’ earnings estimates. That compares with a 20 percent slide for Brazil’s Bovespa Index, which trades at 9.4 times estimated earnings, according to data compiled by Bloomberg.
To contact the reporter on this story: Jason Corcoran in Moscow at jcorcoran13@bloomberg.net
To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net
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