Polyus Gold Leads Biggest Rise in Three Months: Russia Overnight

Russian equities traded in the U.S. gained the most in three months, led by Polyus Gold International Ltd. (PLZLY), as speculation monetary policy makers will act to spur economic growth sent commodities higher.

The Bloomberg Russia-US Equity Index (RUS14BN) of the most-traded Russian companies in the U.S. jumped 4 percent to 83.48 yesterday, the biggest rally since Feb. 24. Polyus, Russia’s biggest gold producer, advanced the most in eight months while OAO GMK Norilsk Nickel, the world’s largest producer of nickel, increased for a third day. Futures expiring on June 15 on Moscow’s dollar-denominated RTS Index climbed 0.2 percent to settle at 128,310.

The Thomson Reuters/Jefferies CRB Index (CRY) of raw materials rose the most in three months yesterday on speculation the Federal Reserve will take new measures to stimulate growth and as European Central Bank President Mario Draghi said officials stand ready to act as the euro region’s expansion outlook worsens. Russia, the world’s biggest energy exporter and largest producer of nickel and palladium, got almost 50 percent of budget revenue from oil and gas sales last year.

“Russian equities gained as they were helped by crude oil’s strength,” Yan Gloukhovski, a trader at Alfa Capital Markets in London, said by e-mail yesterday. “Europe’s situation remains key for the market, and the ECB language showing more firmness and decisiveness should help the market sustain gains.”

The Market Vectors Russia ETF, a U.S.-traded fund that holds Russian shares, climbed 4.6 percent to $24.74 yesterday. The RTS Volatility Index, which measures expected swings in the index futures, fell for a third day, dropping 1.8 percent to 41.19 in New York.

More Stimulus

United Co. Rusal, the world’s largest aluminum producer, rose 0.4 percent to HK$4.67 in Hong Kong trading as of the noon break. The MSCI Asia Pacific Index gained 1.5 percent today as Indian Prime Minister Manmohan Singh pledged to revive growth in Asia’s third-largest economy.

Polyus’s American depositary receipts led gains on the Bloomberg Russia-US Index, increasing 6.4 percent to $2.65, the biggest increase since Sept. 30.

Gold futures for August delivery climbed 1.2 percent to $1,636.20 an ounce on the Comex in New York yesterday, after touching $1,642.40, the highest since May 7.

The U.S. Federal Open Market Committee meets June 19-20 to consider whether more stimulus is needed after the economy added the fewest jobs in a year in May. Federal Reserve Bank of Atlanta President Dennis Lockhart said yesterday in Fort Lauderdale, Florida, that a fragile recovery may require more stimulus.

Ruble Rises

The Thomson Reuters/Jefferies index rose 1.3 percent to 273.77 in New York yesterday, gaining the most since Feb. 21. The Standard & Poor’s GSCI Spot Index climbed 1.3 percent to 593.06 yesterday, gaining the most since April 2.

The ruble strengthened 1.8 percent to 32.42 per dollar by the close in Moscow yesterday, taking its three-day advance to 3.9 percent, the most since at least 2003, data compiled by Bloomberg show. The ruble gained 1.4 percent to 40.585 per euro and 1.6 percent to 36.0942 against the central bank’s target dollar-euro basket.

Russia’s central bank may have to sell as much as $700 million of foreign currency a day to support the ruble if oil prices weaken, Bank Rossii Chairman Sergey Ignatiev said in St. Petersburg, Russia, yesterday. The central bank sold about $200 million of foreign currency a day in the past three days to slow the ruble’s decline, Ignatiev said.

Oil Prices

Crude oil for July delivery increased 0.9 percent to $85.02 a barrel on the New York Mercantile Exchange yesterday. Prices have risen 2.2 percent this week through yesterday from an eight-month low on June 1.

Brent oil futures for July settlement gained 1.8 percent to $100.64 a barrel on the ICE Futures Europe exchange in London. Urals crude, Russia’s chief export blend, added 2 percent to $98.77 a barrel yesterday, gaining the most since March 16. Urals rose for the first time in five days yesterday, after losing 8 percent in the previous four days.

OAO GMK Norilsk Nickel (NILSY) gained 3 percent to $15.18 in New York yesterday, the most since May 21. The company said net income attributable to shareholders rose to $3.6 billion in 2011 from $3.3 billion in 2010, according to a statement dated yesterday on its official website.

To contact the reporter on this story: Halia Pavliva in New York at hpavliva@bloomberg.net

To contact the editor responsible for this story: Tal Barak Harif at tbarak@bloomberg.net

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