Micex Falls to Two-Week Low on Oil Decline, Global Growth Woes

July 12 (Bloomberg) -- Russian stocks fell to an almost two-week low as oil, the nation’s chief export earner, tumbled and concern global growth will falter curbed appetite for riskier assets.

The benchmark Micex Index lost 0.8 percent to 1,394.30 by the close in Moscow. Power companies OAO MRSK Holding and Federal Grid Co. dropped more than 2.6 percent. OAO Raspadskaya declined 4.4 percent after posting a 1 percent coal output drop in the first half of the year yesterday.

Emerging-market stocks tumbled for a seventh day, heading for the longest streak of declines since November. U.S. Federal Reserve minutes from a June meeting yesterday disappointed investors looking for a stronger signal of monetary easing to boost global growth. Crude oil fell 1.6 percent to $84.46 in New York after rising 2.3 percent yesterday. Oil and gas contribute about 50 percent of Russia’s state revenue.

“The Fed minutes gave a hint of further stimulus but it’s unclear when it’ll happen, it’s likely getting delayed,” Dmitry Postolenko, who manages $110 million in Russian assets at Kapital Asset Management LCC in Moscow, said by phone. “Uncertainty” about Europe’s debt crisis remains, he said.

Easing Policy

A few members of the Federal Open Market Committee said the Fed should ease policy to move the economy toward its targets for full employment and stable prices, according to minutes of the June 19-20 meeting released in Washington yesterday. Several others said more action could be warranted if growth slows, risks intensified or inflation seemed likely to fall “persistently” below their goal.

The Fed minutes are “disappointing investors as expected,” Slava Smolyaninov, an analyst at UralSib Capital, said in an e-mailed research note. “All attention will be on the initial jobless claims.”

OAO Sberbank fell 1.3 percent to 88.90 rubles, while VTB Group dropped 2.2 percent to 5.42 kopeks. Citigroup Inc. cut its price estimate for VTB’s global depositary receipts by 18 percent to $4.70. VTB’s shares slumped 2.3 percent to $3.284 in London trading.

OAO RusHydro fell 2.3 percent to 84.53 kopeks. The shares slumped for the first time in four days after IFC Metropol cut Russia’s largest hydropower company to hold from buy on bets the company will issue new shares.

Globaltrans Investments Plc gained 1.8 percent to $17.20 in London, the highest level since June 19. The London-listed Russian freight operator raised more than initially expected in a secondary public offering.

Standard & Poor’s GSCI Commodity Index fell 0.9 percent to 607.01 after gaining 1.1 percent yesterday.

Russia’s benchmark index, which has lost 0.6 percent this year, trades at 5.1 times estimated earnings. That compares with 9.3 times projected earnings for the average company on the MSCI Emerging Market Index, which has dropped 0.6 percent this year.

Russian equities have the cheapest valuations among 21 emerging markets tracked by Bloomberg.

To contact the reporter on this story: Ksenia Galouchko in Moscow at kgalouchko1@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net