Russian stocks dropped for a fifth day, extending their biggest discount since 2009 to peers as crude traded near a four-month low and the International Monetary Fund cut the nation’s growth estimate.
The Micex Index (INDEXCF) tumbled 1 percent to 1,338.51 by 11:34 a.m. in Moscow, after falling to the lowest since June 28 yesterday. The measure has retreated 14 percent from this year’s high on Jan. 28. Trading volumes were 39 percent above the 30-day average, while 10-day price swings dropped to 14.898.
Crude, Russia’s chief export, decreased 0.3 percent to $88.47 per barrel in New York. The IMF cut its global economic growth forecast for 2013, reducing Russia’s outlook for this year to 3.4 percent from 3.7 percent forecast in January, according to a report yesterday.
The benchmark Micex gauge is valued at 0.7 times net assets, compared with 1.6 for the MSCI Emerging Markets Index, the biggest gap since February 2009, according to data compiled by Bloomberg. The relative strength index on the Micex was at 20. A value below 30 signals the index is oversold and may reverse losses.
The IMF reduced the Euro-area outlook to a 0.3 percent contraction from a 0.2 percent contraction forecast in January. Europe is Russia’s biggest trade partner.
The world’s biggest energy exporter is probably already in recession as demand for commodities falters amid the global slowdown, Ksenia Yudaeva, President Vladimir Putin’s representative to the Group of 20 nations, said yesterday. Putin has called for a plan to revive Russia’s flagging economy after policy makers cut the 2013 growth forecast to 2.4 percent from 3.6 percent amid a decline in oil and metals prices this year.
The S&P GSCI Spot Index of commodities was little changed. The dollar-denominated RTS Index (RTSI$) declined 0.9 percent to 1,344.93.
OAO Rostelecom, the country’s biggest fixed-line phone operator, retreated 1.6 percent to 105.97 rubles, headed for a third day of declines. The sale of shares by stock option program participants may be behind the slide, Luis Saenz, head of equity sales and trading at BCS Financial Group in London, wrote in an e-mail to clients yesterday.
OAO Surgutneftegas, an oil producer, decreased 2 percent to 26.716 rubles.
The RTS Volatility Index, which measures expected swings in stock futures, dropped 0.9 percent to 22.96, the second day of declines. The Market Vectors Russia ETF, the largest dedicated Russian exchange-traded fund, added 1 percent to 26.21 yesterday, while the Bloomberg Russia-US Equity Index (RUS14BN) rose 0.7 percent to 91.02.
Russian equities have the cheapest valuations among 21 emerging markets tracked by Bloomberg. The Micex trades at 5 times estimated earnings and has lost 8.3 percent this year, compared with 10.4 times for the MSCI Emerging Markets Index (MXEF), which has slid 4.1 percent in the period.
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