Russian Stocks Climb to Three-Week High as Energy Producers Rise

Russia stocks rose to the highest level in three weeks as growing confidence that economies worldwide are recovering boosted demand for energy producers.

The benchmark Micex Index soared 1.4 percent to 1,407.86 by the close in Moscow, the strongest level since July 23 and bringing a three-day rally to 3.3 percent. OAO Gazprom (GAZP), Russia’s gas export monopoly, added 2.4 percent, while OAO Lukoil had the steepest gain in more than a month.

A report today showed German investor confidence rose more than forecast in August after data last week indicated industrial output and exports in China improved, fueling speculation the nation’s demand for raw materials will rise. U.S. retail sales advanced for a fourth month in July, the Commerce Department said.

“Markets are heading upwards as investors pick companies that are exposed to Chinese and European data,” Vadim Bit-Avragim, a portfolio manager at Kapital Asset Management LLC in Moscow, said by phone today.

The ZEW Center for European Economic Research in Mannheim said its index of expectations for economic growth in Germany, Europe’s largest economy, reached 42 from 36.3 in July.

Gazprom Rallies

Brent oil, Russia’s main export earner, rose for the third day, advancing 0.4 percent to $109.42 in London, while crude oil fluctuated in New York. Russia receives about half of its budget revenue from oil and natural gas sales.

Gazprom gained to 132.12 rubles, the highest close since May 10. Lukoil, the nation’s biggest non-state controlled crude producer, rose 1.5 percent, the most since July 12, to 1,949.20 rubles. The companies have the biggest weightings in the Micex Index (INDEXCF) at about 16 percent and 14 percent, respectively.

OAO Mechel, a steel and coal producer, gained 2.2 percent and OAO Severstal, which also makes steel, rose 1.7 percent as iron ore and coking coal prices rallied.

“Expectations of a Chinese domestic incentive programs is driving the move” in the commodity prices, Luis Saenz, London-based head of equity sales and trading at BCS Financial Group, said in an e-mailed note today.

The Bloomberg Russia-US Equity Index of the most-traded Russian stocks in New York rose 0.8 percent to 91.67, advancing for the fourth day. The RTS Volatility Index, which measures expected swings in the stock futures, fell 0.5 percent.

To contact the reporter on this story: Valeriya Ivashchenko in London at vivashchenk1@bloomberg.net

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

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