Russian stocks fell to the lowest in more than a week, after oil, the nation’s biggest export earner, declined and as investors await a possible announcement on more stimulus from the U.S. Federal Reserve.
The 30-stock Micex Index (INDEXCF) slipped 0.9 percent to 1,437.14 by the close in Moscow, the lowest level since Aug. 20, after adding as much as 0.6 percent earlier. Out of 30 stocks, 28 retreated.
Power (MXRU0UT) utility stocks slid, with OAO MRSK Holding retreating 5.2 percent and Federal Grid Co. dropping 3.1 percent. Energy producer OAO Gazprom, the country’s largest company, fell 0.6 percent, the most in a week. Oil in New York dropped from its highest close in more than a week, sinking 1.4 percent to $94.96 a barrel. Brent crude declined 0.3 percent to $112.27 a barrel.
Investors may not receive signals of more stimulus from Fed Chairman Ben S. Bernanke during a speech at a symposium in Jackson Hole, Wyoming, at the end of the week, according to Kingsmill Bond, Citigroup Inc’s chief strategist for Russia.
“The market is looking forward to the Jackson Hole speech,” Citi’s Bond said by telephone. “Citi is a bit skeptical about the possibility of more easing measures.”
Metal producers OAO Mechel (MTLR) and OAO Magnitogorsk Iron & Steel lost 2.8 percent and 3.6 percent respectively.
Standard & Poor’s GSCI Index dropped 0.3 percent to 666.84, heading for the lowest since Aug. 15. Most metals declined on the London Metal Exchange, including tin, copper and aluminium.
OAO Mobile TeleSystems tumbled 1.6 percent to 240.91 rubles, the most in more than a week. Russia’s biggest mobile telephone company reported a $1.08 billion writedown on Uzbek assets yesterday. That raised concern the company will cut dividends, UralSib Financial Corp. said in a note to investors today.
OAO Severstal dropped 1.9 percent to 376.10 rubles, the lowest level since Aug. 3. Russia’s second-largest steel producer by output said second-quarter earnings before interest, taxes, depreciation and amortization rose 18 percent to $664 million from a quarter earlier, missing the average estimate of 10 analysts surveyed by Bloomberg.
Russian stocks pared losses after data showed U.S. gross domestic product climbed at a 1.7 percent annual rate from April through June, up from an initial estimate of 1.5 percent.
“If we get the easing announcement from Bernanke, it’ll be a major catalyst for the market,” Tom Mundy, chief strategist at Otkritie Capital in Moscow, said in an interview yesterday. “There’s still room for the market to move, it’s not priced in.”
OAO Rostelecom, Russia’s dominant long-distance phone operator, rose 0.2 percent to 125.48 rubles. The company announces second-quarter earnings tomorrow.
Russian equities trade at the cheapest valuations among 21 emerging markets tracked by Bloomberg. The Micex trades at 5.3 times estimated earnings after gaining 2.6 percent this year. That compares with 10 times for the MSCI Emerging Markets Index, which has added 4.3 percent.
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