Russia Stocks Climb to Three-Month High on Oil, German Support

By Jason Corcoran

Aug. 7 Bloomberg) -- Russian stocks rose to their highest in more than three months as oil advanced and Germany indicated it will support the European Central Bank’s bond-buying plan, boosting appetite for riskier assets.

The Micex Index added 0.8 percent to 1,450.74 by the close in Moscow, a third day of gains and its strongest since April 28. OAO Magnitogorsk Iron & Steel, OAO Novolipetsk Steel and OAO Severstal, the country’s biggest producers of the metal, all surged by at least 2.5 percent. OAO Sberbank, Russia’s largest lender, rose 0.8 percent after reporting a 6 percent gain in seven-month net income.

Oil, Russia’s main export earner, climbed as much as 0.7 percent to $92.89 a barrel in New York. German Chancellor Angela Merkel backed a bond-buying plan announced last week by the ECB, a spokesman said yesterday, fanning speculation the monetary authority will act to cut borrowing costs for Spain and Italy.

“We are hearing from several quarters that risk-on is back,” said Alexey Zabotkin, an analyst at VTB Capital, in an e-mailed report today. “Over the last two trading sessions, it feels as though the stock market, and risk appetite, has been stretching its legs after the two-month mid-summer siesta.”

Russian stocks yesterday advanced to their highest in a month on optimism an economic recovery in the U.S. is on track and as creditors said Greece is making progress meeting bailout terms.

Sberbank, which has a 14 percent weighting in the Micex, added 0.8 percent to 93.96 rubles. The lender said net income advanced 6 percent in the first seven months of 2012 compared with a year earlier as the company made more loans to households and companies.

Oil producer OAO Lukoil increased 1.5 percent to 1,872.8 rubles while OAO Gazprom, Russia’s gas export monopoly, increased 1.2 percent to 156.61 rubles.

The Micex trades at 5.3 times estimated earnings and has increased 3.5 percent this year. That compares with a multiple of 9.9 times for the MSCI Emerging Markets Index, which has added 5.7 percent this year.

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