Russian stocks jumped to the highest in three weeks after the Federal Reserve and five other central banks reduced the cost of emergency dollar funding for European lenders and China cut banks’ reserve requirements.
The Micex Index surged 3.1 percent to 1,499.62 by the 6:45 p.m. close in Moscow, its highest level since Nov. 8 after paring an earlier loss of as much as 0.5 percent. Russia’s biggest lenders OAO Sberbank and VTB Group leapt 6 percent and 5.8 percent, respectively. OAO Mechel, the Russian coal producer, jumped 10 percent. The dollar-denominated RTS Index rose 5.1 percent to 1,540.81, its biggest gain since May 2010.
Stocks and futures rose globally after the six central banks, including the Federal Reserve, agreed to reduce the interest rate on dollar liquidity swap lines by 50 basis point. China cut the amount of cash that banks must set aside as reserves for the first time since 2008 to safeguard growth.
Crude, Russia’s main export earner, jumped as much as 0.6 percent to $100.35 a barrel in New York. Stocks fell earlier as investors bet Standard & Poor’s downgrade yesterday of some of the world’s biggest lenders may exacerbate Europe’s debt crisis.
“This coordinated positive jolt by global central banks has been positive for commodity-focused emerging markets like Russia.” Marco Casas, vice-president of equity sales at Otkritie Capital in New York, said in e-mailed comments today.
All but two of the Micex’s 30 component stocks gained. Sberbank rose 6 percent to 87.55 rubles after posting a better-than-expected profit jump in the third quarter as it increased lending and released reserves set aside to cover bad loans.
Net income rose to 79.8 billion rubles ($2.54 billion) from 45.8 billion rubles a year earlier, according to a statement on the Moscow-based lender’s website today. That beat the average estimate of 75 billion rubles from nine analysts surveyed by Bloomberg News.
Euro-area finance ministers approved enhancements yesterday to the European Financial Stability Facility, while backing off setting a target for its firepower and seeking a greater role for the International Monetary Fund in fighting the debt crisis.
Crude oil for January delivery rose $1.30, or 1.3 percent, to $101.09 a barrel at 9:16 a.m. on the New York Mercantile Exchange. Futures touched $101.75, the highest level since Nov. 17. Prices are up 11 percent this year. Copper for March delivery gained 3.8 percent to $3.5205 a pound on the Comex in New York, cutting this month’s drop to 3.1 percent.
The Micex has lost 11 percent this year as Europe’s debt crisis spread. The measure trades at 5.2 times analysts’ earnings estimates for member companies.
Russian Steelmaker Tumbles
The Micex’s drop compares with a 17 percent slide for Brazil’s Bovespa index, which trades at 10.4 times estimated earnings, according to data compiled by Bloomberg. The Shanghai Composite Index trades at 11.1 times estimated earnings, and the BSE India Sensitive Index has a ratio of 14.
OAO Severstal, Russia’s largest steelmaker by market value, tumbled the most in more than a week, dropping 4.2 percent to 424.7 rubles. The stock gained 11 percent in the previous three days.
The company plans to spin off its Nordgold NV mining unit by “late January 2012,” according to a regulatory filing today.
The spinoff will be carried out by exchanging Severstal shares and global depositary receipts for Nordgold shares, which are owned 100 percent by Severstal’s indirect unit, Lybica Holdings BV, Severtsal said.