Russian stocks fell for a second day after oil prices slid to the lowest level this year. OAO Lukoil, the country’s biggest non-state crude producer, led declines on the benchmark stock gauge.
The 30-stock Micex Index retreated 0.4 percent to 1,385.81 by the close in Moscow, paring an earlier slide of 1.4 percent. Lukoil, which has the largest weighting in the index, lost 2.8 percent after the register for shareholders to receive a 75 ruble dividend closed yesterday. OAO Surgutneftegas, Russia’s fourth-largest oil producer, lost 1.5 percent. OAO Gazprom Neft, the oil arm of the country’s natural gas export monopoly, rose 1.3 percent.
Russia-focused equity funds recorded this year’s biggest outflows in the week ended May 9, posting redemptions of $188 million, according to EPFR Global. Oil, Russia’s main export earner, fell 1 percent to $96.13 a barrel in New York yesterday, the lowest settlement since Dec. 19. Stocks pared declines after China reduced the amount of cash that banks must set aside as reserves for the third time in about five months.
“The Russian market is pressured by the decline in oil prices,” Mark Rubinstein, head of research at IFC Metropol, said by phone from Moscow. “Investors are leaving the emerging markets. It’s unlikely that the Russian market will rise next week, most likely will be flat.”
The markets are open today to substitute for a public holiday earlier this week. A total 8.5 billion shares changed hands on the Micex, according to data on the exchange’s website, down from the 47.3 billion traded yesterday.
Chinese policymakers are seeking to buoy growth amid signs the country’s economic expansion is losing steam. Reserve ratios will fall 50 basis points, effective May 18, the People’s Bank of China said on its website today. The level for the nation’s largest lenders will decline to 20 percent based on previous statements.
“China remains one of the most risky factors for the emerging markets, so any positive signal offers support,” Alexei Yazikov, an analyst at Aton Capital, said by phone.
China’s industrial output rose 9.3 percent in April from a year earlier, the statistics bureau reported yesterday. That missed a 12.2 percent median estimate in a Bloomberg News survey of 32 economists.
The Standard & Poor’s GSCI Spot Index of 24 commodities slid for an eighth day yesterday, dropping to 642.58, the lowest since Dec. 21.
Russia, the world’s biggest energy exporter, received almost 50 percent of budget revenue from oil and gas sales last year, according to government estimates. Brent oil for June settlement slipped 47 cents, or 0.4 percent, to end the session at $112.26 a barrel on the London-based ICE Futures Europe exchange.
Trading volumes on the Micex slumped 30 percent in April from the month before compared with a 22 percent drop in the same period a year earlier.
Russian stocks trade at 5.2 times estimated earnings, having lost 1.2 percent this year. That compares with a 6 percent gain for the MSCI Emerging-Market Index which trades at 9.8 times projected earnings.
-- Editors: Alex Nicholson, Torrey Clark