Russian Stocks Decline Second Day Before U.S. Confidence Report

Russian stocks dropped for a second day, heading for the weakest close in two weeks, as investors awaited U.S. reports on consumer confidence and house prices.

The Micex Index (INDEXCF) sank 0.9 percent to 1,489.16 by 4:55 p.m. in Moscow, poised for the lowest closing level since Nov. 13, with 38 of 50 stocks declining. OAO Inter RAO, the worst performing stock in the index this year, slid for a third day. OAO Mosenergo, a utility controlled by natural gas exporter OAO Gazprom, headed for the lowest close since January 2009.

Russian equities followed the Stoxx Europe 600 Index lower before the release of the U.S. Conference Board’s consumer confidence figures and the S&P/Case-Schiller index of home prices. Energy companies and utilities fell on average more than 1 percent in Moscow as crude, Russia’s biggest export earner, dropped as much as 0.4 percent in London.

“Activity is very low, especially on the buying side,” Kirill Yankovskiy, director for equity sales at UralSib Securities in London, said by e-mail. “Some people are closing their speculative positions in the deep value stocks, like the Russian power utilities, ahead of the end of the month.”

Brent crude, the benchmark grade for half the world’s oil, dropped as much as 48 cents to $110.52 a barrel before trading unchanged at $111. The U.S. Conference Board’s consumer confidence index probably rose to 72.6 this month from 71.2 in October, according to the median estimate of economists in a Bloomberg survey. The S&P/Case-Schiller index of home prices climbed 13 percent in September from the same month in 2012, a separate study shows.

Energy Companies

Gazprom fell for a second day, losing 2.3 percent to 144.50 rubles. OAO Rosneft, the world’s biggest publicly traded oil company by output, decreased 1.3 percent to 241.17 rubles.

Inter RAO, which has lost 70 percent this year, slid 3.2 percent to 0.73 kopeks. A kopek is a hundredth of a ruble. Mosenergo declined 3.9 percent to 80.48 kopeks.

The RTS Index (RTSI$) retreated 0.8 percent to 1,422.13. Russia’s equities have the cheapest valuations among 21 emerging economies monitored by Bloomberg, with shares on the Micex trading at 4.3 times projected 12-month earnings, compared with a multiple of 10.5 for the MSCI Emerging Markets Index.

PIK Group was among advancers after the Kommersant newspaper reported that ex-owner of Rosbuilding Sergey Gordeev is in advanced talks with Suleiman Kerimov to buy 47% stake in the developed. The shares added 1 percent to 63.71 rubles.

Grocer OAO Dixy Group gained as much as 0.6 percent to 433.16 rubles after Goldman Sachs Inc. said stronger economic growth may boost consumer companies’ earnings as it raised its Broad Russian Index to overweight. Electronics retailer OAO M.video added 0.6 percent to 285.55 rubles.

Russia’s gross domestic product growth will accelerate to 3 percent in 2014 and 3.5 percent in 2015 “on the back of improving external and internal demand,” Goldman analysts led by Christopher Eoyang say an in e-mailed note. The economy expanded 1.2 percent in the third quarter, matching the figure for the previous three months, according to the Federal Statistics Service.

To contact the reporter on this story: Vladimir Kuznetsov in Moscow at vkuznetsov2@bloomberg.net

To contact the editor responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net

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