RTS Futures Rise on Oil as French Debt Defies Downgrade: Russia Overnight

Russian stock futures climbed as oil, the nation’s biggest export earner, advanced and French borrowing costs dropped in the first bond sale since Standard & Poor’s downgraded the nation.

Futures expiring in March on Moscow’s dollar-denominated RTS (RTSI$) index gained 0.3 percent to 145,250 in U.S. trading hours yesterday. The RTS Volatility Index (RTSVX), which measures expected swings in the contracts, dropped 1.8 percent to 39.98.

Urals crude, Russia’s chief export oil blend, jumped 0.5 percent to $110.24 as Mohammad-Ali Khatibi, Iran’s governor to the Organization of Petroleum Exporting Countries, said that a disruption to supplies through the Strait of Hormuz would cause a shock to world markets. Yields on French government one-year bonds dropped five basis points at a sale of the debt yesterday after the country was stripped of its top AAA credit rating by S&P on Jan. 13 because of the European debt crisis.

“Global markets seem to have digested Friday’s news about the wave of sovereign downgrades in the EU relatively well,” Benoit Anne, head of global emerging markets strategy in London at Societe Generale SA, France’s second-largest lender, said by e-mail yesterday. “The markets backdrop seems to be turning gradually more supportive of risky assets.”

S&P also downgraded the rankings of Cyprus, Italy, Portugal and Spain by two steps and cut Austria, Malta, Slovakia and Slovenia by one.

Crude on the New York Mercantile Exchange rebounded from a four-week low, adding 1 percent to $99.69 before closing at 1:15 p.m. local time because of the Martin Luther King Jr. holiday. U.S. stock markets were closed.

Postponed Embargo

Iran’s Vice-President Mohammad Reza Rahimi said last month that the country may close the Strait of Hormuz in response to a possible embargo from western nations opposed to its nuclear program. A European Union halt to imports of Iranian oil may be postponed for six months to allow some nations to find new supplies, two EU officials said last week.

Russia’s ruble-denominated, 30-stock Micex index was little changed yesterday at 1,464.42, while the RTS (RTSI$) gained 0.6 percent to 1,455.32. The futures trading session in New York hours started 10 minutes later than usual because front month option contracts were expiring, according to an e-mailed statement from the newly merged Micex-RTS Exchange.

Alexei Miller, chief executive officer of OAO Gazprom, the world’s biggest producer of natural gas, will meet with neighboring Ukraine’s top energy official, Yuriy Boyko, in Moscow today to discuss gas pricing. The former Soviet republic is proposing reducing gas imports by almost 50 percent, Gazprom said in a Jan. 12 statement.

OAO Transcontainer, a unit of OAO Russian Railways, will announce nine-month earnings results today, while Russia’s biggest steelmaker, Evraz Plc (EVR), will report fourth-quarter and full-year 2011 production results.

United Co. Rusal, the world’s largest aluminum producer, rose 3.4 percent to HK$5.20 in Hong Kong trading as of the noon trading break. The MSCI Asia Pacific Index gained 1.3 percent today.

To contact the reporter on this story: Emma O’Brien in New York on eobrien6@bloomberg.net

To contact the editor responsible for this story: Emma O’Brien in New York on eobrien6@bloomberg.net

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