Russian stocks rose to a three-month high as crude advanced on bets China will take steps to stoke growth, boosting the outlook for equities in the world’s biggest energy exporter.
The benchmark Micex Index (INDEXCF) climbed 0.5 percent to 1,456.41 by the close in Moscow, the strongest since April 28. OAO MRSK Holding, the power distribution company, surged 3.3 percent. OAO Surgutneftegas, Russia’s fourth-biggest oil company, rose 1.8 percent.
Urals crude, Russia’s main export blend, climbed 0.6 percent to $112.89, its seventh day of gains and the longest streak of advances since Feb. 24. China’s inflation cooled for a fourth straight month in July, providing more room for policies to stimulate growth in the world’s second-biggest oil consumer.
“Oil above $110 a barrel is a supportive factor for the Russian economy and the Russian equity markets,” VTB Capital analysts wrote in an e-mailed note today.
The Standard & Poor’s GSCI Spot Index of 24 raw materials headed for the highest level since May 3 on prospects policy makers around the world will take further steps to boost their economies after German industrial production declined and China’s inflation report. Russia, the world’s largest producer of nickel and palladium, received last year about half of its 2011 budget revenue from sales of oil and natural gas.
“When people believe oil and commodities are to gain further, they buy Russian equities,” Andrei Bogdanov, who helps manage $8 billion in Russian equities and bonds at OAO Gazprombank, said in a telephone interview from Moscow yesterday. “The markets are already expecting new stimulus measures, although it’s still a question in what form and when those measures will be approved.”
OAO Novolipetsk Steel (NLMK), Russia’s biggest producer of the metal by market value, lost 0.9 percent after the company said third-quarter revenue may decline as much as 10 percent because of low prices and poor export demand.
The Micex trades at 5.4 times estimated earnings and has increased 3.9 percent this year. That compares with a multiple of 10 times for the MSCI Emerging Markets Index, which has added 7 percent this year.
The Market Vectors Russia ETF (RSX), the biggest U.S.-traded exchange-traded fund that holds Russian shares, dropped 0.1 percent to $27.83. The RTS Volatility Index, which measures expected swings in the index futures, fell 0.6 percent to 28.47 today.
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