Russia Stocks Reverse Gain, Fall Most in a Week on ECB Loans

Russian stocks fell the most in over a week after reaching a two-week high in earlier trading as the European Central Bank provided more funds than expected to the region’s lenders.

The Micex Index of 30 shares fell as much as 2 percent and was 1.75 percent lower at 1385.10 at the close in Moscow, its biggest decline since Dec. 12. The index rose as high as 0.8 percent in earlier trading. The RTS Index of dollar-measured trading lost one percent to 1,382.5 after gaining 1.5 percent.

The Frankfurt-based ECB awarded 489 billion euros ($640 billion) in 1,134-day loans, more than economists’ median estimate of 293 billion euros in a Bloomberg News survey, sending European stocks lower.

“The general mood soured after news on ECB loans. The market remains very nervous,” Alexander Zakharov, head of international equity sales at Finam Investment Co. in Moscow, said by e-mail. “In the current environment, Russian stocks (INDEXCF) are completely driven by external news.”

OAO Gazprom, the world’s biggest gas supplier and owner of Russia’s fifth-biggest oil producer, fell 1.6 percent to 169.71 rubles. The shares jumped 3.9 percent yesterday after the company said yesterday it plans to cut spending and boost dividends next year. OAO Rosneft and OAO Lukoil, the largest oil companies, declined 1.1 percent and 1 percent, respectively.

Oil extended gains after a U.S. government report showed a decline in inventories almost five times as large as expected. Crude for February delivery rose $1.64, or 1.7 percent, to $98.88 a barrel at 10:37 a.m. on the New York Mercantile Exchange.

Rusal, Magnitogorsk

United Co. Rusal, the world’s biggest aluminum producer, declined 0.8 percent to 198.57 rubles after earlier leading gains in the Micex with a 2.3 percent increase.

OAO Mechel (MTLR), the largest supplier of coal to steelmakers, fell as much as 2.8 percent to 268.20 rubles and closed 2.4 percent lower at 269.2 rubles. OAO Magnitogorsk, Russian billionaire Victor Rashnikov’s steel producer, fell 1.2 percent to 12.69 rubles, its biggest drop in a week.

The Micex, which has lost 18 percent this year, trades at about 4.7 times estimated earnings compared with about 10 times for Brazil’s Bovespa index, 10.5 times for the Shanghai Composite Index (SHCOMP) and 13.7 times for the BSE India Sensitive Index, according to data compiled by Bloomberg.

To contact the reporters on this story: Brad Cook in Moscow at bcook7@bloomberg.net; Denis Maternovsky in Moscow at dmaternovsky@bloomberg.net

To contact the editors responsible for this story: Hellmuth Tromm at htromm@bloomberg.net; Gavin Serkin at gserkin@bloomberg.net

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