Russian shares fell for a fifth day on concern the Federal Reserve will further reduce monetary stimulus this week, paring demand for emerging-market assets.
The Micex Index declined 0.3 percent to 1,474.40 by 2:33 p.m. in Moscow, taking the five-day drop to 2 percent. OAO GMK Norilsk Nickel, the world’s biggest producer of the metal, lost 1.5 percent to 5,383 rubles. OAO KamAZ, the Russian truck maker partly owned by Daimler AG, tumbled 2.6 percent to 48.00 rubles.
The Fed starts a two-day meeting today and policy makers may decide to lower the $75 billion monthly bond-buying program by $10 billion, according to economists at Goldman Sachs Group Inc., JPMorgan Chase & Co. and Credit Suisse Group AG in New York. Russian car sales are set to decline 3 percent to 2.54 million vehicles this year as slow economic growth and the weakening ruble shake investor confidence, said Sergey Litvinenko, senior manager at PricewaterhouseCoopers LLP.
“Today the attention of all market participants will be glued to the Fed’s comments,” Yuri Selyandin, a money manager who helps oversee about $2 billion at GHP Group Inc. in Moscow, said by phone. “The ruble will strengthen but we shouldn’t expect it to return to the levels of the start of the year until Russia’s economic growth picks up.”
Russia’s currency climbed from a five-year low, gaining 0.2 percent versus the dollar to 34.6155. The ruble posted its worst start of the year since 2009 after the country’s economy grew 1.2 percent in the third quarter, the least in almost four years, and as Fed tapering bets eroded demand for risk.
The Micex Index (INDEXCF) advanced an average 77 percent during the Fed’s first two rounds of bond buying, and fell 0.6 percent in periods of no stimulus, the biggest difference of 46 emerging and developed markets tracked by Bloomberg.
Grocer OAO Dixy Group rose as much as 2.5 percent before paring the increase to 0.3 percent at 350 rubles, as volume climbed to 1.3 times the three-month daily average. The operator of discount food stores said December sales growth slowed to 17 percent from 24 percent a month earlier, while 2013 revenue grew 23 percent. The stock is down 14 percent in January.
“We view the unimpressive trading results as largely priced in,” VTB Capital analysts led by Maria Kolbina, said in an e-mailed note. Weakness this month constitutes a “buying opportunity in the name,” they said.
OAO Magnit, the nation’s biggest food retailer, advanced 3.5 percent to 8,449.70 rubles, after tumbling 1.2 percent yesterday. Magnit posted a record profit margin in the fourth quarter as it secured more favorable purchasing terms from suppliers and curbed costs, it said yesterday. The company said it will increase this year’s dividend to 40 percent of net income. Global depositary receipts rose 2.1 percent in London.
The dollar-denominated RTS Index (RTSI$) declined 0.3 percent to 1,342.22. Russian equities have the cheapest valuations among 21 developing-nation economies monitored by Bloomberg, with shares on the benchmark Micex trading at 3.3 times projected 12-month earnings, compared with a multiple of 9 for the MSCI Emerging Markets Index.
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