Russian stocks fell, pushing the benchmark Micex gauge down for a third day, as oil retreated amid concern the European debt crisis and mounting bad debts in China will hobble demand.
The Micex lost 1 percent to 1,460.56 at the 6:45 p.m. close in Moscow, its third weekly drop and the weakest close since Nov. 1. OAO Mechel, Russia’s biggest coking coal producer, tumbled to the lowest closing price since Oct. 6 and OAO Lukoil, Russia’s second-largest oil company, fell as much as 2.6 percent. The dollar-denominated RTS Index declined 1.1 percent to 1,495.87, a fifth day of losses.
Emerging-market stocks retreated as oil prices slid below $100 a barrel yesterday after European bond yields rose, signaling the region’s leaders are struggling to stem the crisis that’s threatening to derail economic growth and demand for commodities. A Chinese banking regulator told lenders last week that loans to builders are likely to sour, a person with knowledge of the matter said.
“Concern that China’s economy is facing into a faster slowdown is added to the persistent threat posed by the unresolved euro-zone crisis,” Chris Weafer, chief strategist at Troika Dialog in Moscow, wrote in an e-mailed note to clients today. “Investors prefer to wait on the sidelines for a clearer picture to emerge in Europe.”
Crude sank after the close of trading in Moscow yesterday and dropped as much as 0.8 percent today before trading little changed at $98.85 a barrel. Crude and natural gas account for 17 percent of Russia’s gross domestic product and about 40 percent of revenues.
Rosneft, Uralkali Drop
OAO Rosneft, Russia’s biggest oil company, declined 2.2 percent to 215.44 rubles, its weakest closing level since Nov. 1. OAO Uralkali, a fertilizer producer, dropped 0.6 percent to 245.27 rubles, its worst closing level since Oct. 20.
The Micex index trades at 5.2 times analysts’ earnings estimates for member companies, the cheapest of the 21 major emerging markets tracked by Bloomberg.
The gauge has lost 13 percent in 2011 compared with an 18 percent slide for Brazil’s Bovespa index, which trades at 10.2 times estimated earnings, according to data compiled by Bloomberg. The Shanghai Composite Index trades at 11.4 times estimated earnings, and the BSE India Sensitive Index has a ratio of 14.1. The MSCI Emerging Markets Index has fallen 19 percent this year.
The ruble strengthened less than 0.1 percent to 30.8326 per dollar, a first day of gains in five. Russia’s $3.5 billion of Eurobonds due 2020 rose, pushing the yield down six basis points to 4.428 percent.
OAO Sberbank, Russia’s biggest lender, fell 0.4 percent to 80.10 rubles and VTB Group, the second-biggest bank, dropped for the sixth day, sliding 1.7 percent to 6.81 kopeks.