Russian stocks rose for a second consecutive day, reaching the highest level in six days, as OAO Aeroflot surged to a more than two-year high.
The nation’s benchmark Micex Index (INDEXCF) added as much as 0.7 percent to 1,459.08, the highest level since Dec. 3, before trading at 1,458.05 at 3:49 p.m. in Moscow. Aeroflot, Russia’s biggest airline, jumped 5.1 percent to 72.01 rubles, the most since August 2011, after last week reporting an 88 percent gain in third-quarter profit. OAO Magnit, the nation’s biggest food retailer, increased 2.7 percent to 8,963.80 rubles, bringing this year’s advance to 86 percent, the best performer on the Micex. Magnit gained 2.1 percent to $64.80 in London.
Consumer services shares added 2.6 percent, the most among nine Micex sector groups, while consumer goods rose 1.3 percent, and health care 0.8 percent. Oil and gas stocks, the biggest sector, climbed 0.3 percent. Russian stocks slumped 2 percent in November, the worst month since May, amid concern the nation’s economy is foundering. The Micex fell 1.4 percent so far in 2013, compared with a 27 percent gain for the Standard & Poor’s 500 Index. (SPX)
“I expect the Micex to finish the year at 1,500,” Vladimir Bragin, head of research at Alfa Capital in Moscow, where he helps manage $2.9 billion, said by phone. “It makes sense to buy at the moment, there’s growth opportunity here. Aeroflot posted good results. Magnit is a good company.”
OAO Tatneft, a regional oil producer, gained 0.9 percent to 198.11 rubles. The stock climbed 1.1 percent to $36.23 in London. Renaissance Capital Group Inc. raised its recommendation on the stock to buy from hold and increased its price estimate to $50, according to an e-mailed note today.
Emerging-market stocks rose on Dec. 6, as signs the U.S. economy is recovering outweighed concern the Federal Reserve will push forward plans to taper stimulus. Russia cut its 2014 economic growth forecast to 2.5 percent from 3 percent, Interfax reported last week, citing Economy Minister Alexei Ulyukayev. This year’s inflation forecast was raised to 6.2 percent from 6 percent, the news service said.
Russian inflation accelerated more than economists forecast in November, with consumer prices rising 6.5 percent from a year earlier, the Federal Statistics Service in Moscow said last week. That’s the fastest pace in three months and leaves less room for central bank Chairman Elvira Nabiullina to lower borrowing costs to stimulate the stalling economy.
Russia-dedicated stock funds lost less than $90 million in the week ended Dec. 4, UralSib Capital said in a note last week, citing EPFR Global data. Redemptions reached $3.52 billion this year through Nov. 29, the most since the Boston-based research firm started tracking flows in 1996, EPFR Global said in an e-mail Dec. 3.
The dollar-denominated RTS Index (RTSI$) gained 0.7 percent to 1,400.42. Russia’s equities have the cheapest valuations among 21 emerging-market economies monitored by Bloomberg, with shares on the benchmark trading at 4.4 times projected 12-month earnings, compared with a multiple of 11.8 for the MSCI Emerging Markets Index.
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