Russian stocks climbed as investors awaited Federal Reserve Chairman Janet Yellen’s first report on monetary policy and oil advanced.
The Micex Index increased 0.5 percent to 1,484.09 by 1:49 p.m. in Moscow. Oil producers OAO Tatneft and OAO Lukoil rose at least 0.9 percent. OAO Moscow Exchange, the nation’s biggest bourse, added 2.2 percent to 64 rubles. MSCI Inc. may double the exchange’s weighting in tomorrow’s rebalancing, according to VTB Capital and Sberbank CIB.
Yellen will deliver her first semi-annual monetary-policy testimony today as investors weigh the pace of stimulus reductions against data this week that may show U.S. retail sales stalled while jobless claims declined. Oil, Russia’s chief export earner, gained 0.4 percent to $109.07 a barrel in London.
“Yellen’s comments will be very important for the market as she may provide clarity on the pace of tapering and rate hikes,” Anvar Gilyazitdinov, who manages about $10 million at Rye, Man & Gor Securities in Moscow, said by phone. “A weaker ruble and strong oil give a boost to oil stocks.”
The Fed pressed ahead with stimulus cuts in January, reducing its monthly bond buying by $10 billion to $65 billion. The Micex Index (INDEXCF) advanced an average 77 percent during the Fed’s first two rounds of debt purchases, and fell 0.6 percent in periods of no stimulus, the biggest difference of 46 emerging and developed markets tracked by Bloomberg.
Bank Rossii will probably leave its main one-week rate unchanged at 5.5 percent on Feb. 14, according to all 22 economists surveyed by Bloomberg.
The dollar-denominated RTS Index (RTSI$) gained 0.6 percent to 1,343.67. Russian equities have the cheapest valuations among 21 developing-nation economies monitored by Bloomberg. Shares on the Micex trade at 3.1 times projected 12-month earnings, compared with a multiple of 9.2 for the MSCI Emerging Markets Index.
The ruble has slumped 5.4 percent against the dollar in 2014, the third-worst performer among 24 emerging-market currencies tracked by Bloomberg.
That depreciation should help support oil companies in 2014, according to Goldman Sachs Group Inc., which raised its coverage view on the nation’s oil industry to attractive from neutral yesterday.
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