Russia Stocks Rise 1st Day in 4 as Steelmakers Gain on Stimulus

Russian stocks rose for the first time in four days as steelmakers climbed on speculation central banks from China to the U.S. may take steps to boost growth.

The Micex Index (INDEXCF) gained 0.2 percent to 1,425.99 by 10:18 a.m. in Moscow. OAO Magnitogorsk Iron & Steel rallied 2.2 percent, while OAO Novolipetsk Steel rose 1.2 percent.

China’s factory output unexpectedly shrank for the first time in nine months in August as orders decreased, a government survey showed Sept. 1. Federal Reserve Chairman Ben S. Bernanke said Aug. 31 that he wouldn’t rule out more stimulus as the U.S. jobless rate remained a “grave concern.”

Chairman Bernanke’s justification of the merits of the non-conventional monetary policies maintains the expectation for QE3 to materialise sooner rather than later,” VTB Capital analysts led by Alexei Zabotkin said in an e-mailed note.

The dollar-denominated RTS Index (RTSI$) rose 0.2 percent to 1,392.64.

Crude oil, Russia’s chief export earner, fell 0.2 percent to $96.27 in New York, after rising 2 percent on Aug. 31. Oil and gas contribute about 50 percent to Russia’s state revenue. Brent crude dropped 0.2 percent to $114.33.

Preferred shares of oil producer OAO Surgutneftegas fell 0.2 percent to 20.807 rubles. The stock was the biggest advancer on the Micex last month, adding 11 percent. Morgan Stanley initiated coverage of the shares with an equalweight recommendation, according to today’s report.

Russian equity funds attracted $90 million in the week ended Aug. 29, according to VTB Capital’s research note on Aug. 31, which cited EPFR data.

The Micex trades at 5.3 times estimated earnings and has rallied 1.7 percent this year. That compares with a multiple of 9.9 times and a 3.8 percent advance for the MSCI Emerging Markets Index.

Russian equities have the lowest valuations based on estimated earnings among 21 emerging markets tracked by Bloomberg.

To contact the reporter on this story: Ksenia Galouchko in Moscow at kgalouchko1@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.