Russian stocks retreated for a third day, erasing an earlier advance, as oil dropped on concern Europe’s debt crisis will curb demand.
The Micex Index of 30 shares lost 0.2 percent to 1,468.55 by the close in Moscow, erasing an earlier 1 percent jump. Shares of OAO Magnitogorsk Iron & Steel tumbled 2.1 percent. OAO Sberbank, the nation’s largest lender, declined 0.3 percent. The Russian Depositary Index of London-traded stocks fell 0.1 percent to 1,728.23, its fourth day of declines.
Urals, Russia’s main export oil blend, lost 0.2 percent to $114.60 a barrel. European stocks declined as Spanish banks reported the highest share of non-performing loans in total lending since 1994 and falling home prices signaled slowing growth in China.
“Renewed European worries, in particular in Spain, are drawing most attention from investors,” Michael Kart, managing partner at Spectrum Partners Ltd., said by e-mail. “With softening oil and lack of new inflows to Russian funds, this adds additional pressure on stocks.”
Russia-focused equity funds had their first outflows in 11 weeks in the seven days to April 11, according to EPFR Global data.
The Market Vectors Russia ETF, a U.S.-traded fund that holds Russian shares, fell 0.6 percent to $29.70 in New York. The RTS Volatility Index, which measures expected swings in the index futures, added 0.4 percent to 31.99 points.
Magnitogorsk dropped to 12.646 rubles, its lowest close this year after the steelmaker posted its first annual loss since at least 2002 amid falling metal prices. OAO Severstal, Russia’s second-biggest steelmaker, advanced 0.8 percent to 380.60 rubles, its first increase since April 9.
The MSCI Russia gauge of equities listed in Moscow, London and New York has lost about six percentage points more than the MSCI All-Country World index during the past month. Stocks around the world have retreated since the middle of March as China posted the slowest economic growth in almost three years and investors speculated that Spain may become the fourth euro-area nation to need a bailout.
The International Monetary Fund increased its 2012 global growth forecast to 3.5 percent from 3.3 percent yesterday and said oil will advance 10 percent this year, helping send the Micex as much as 1 percent higher in earlier trading today.
Crude and natural gas account for about 50 percent of Russian government revenue.
The 5.4 price-earnings ratio on the MSCI Russia index is 44 percent below its 9.1 average over the past decade, according to data compiled by Bloomberg. The gauge has the lowest multiple among benchmark indexes in 21 emerging countries tracked by MSCI and Bloomberg, the data show.