Russian stocks gained the most in seven weeks as oil rallied, boosting investor appetite for equities in the world’s biggest energy exporter.
The Micex Index climbed 1.8 percent to 1,454.48 by the close in Moscow, the biggest advance since July 3. Preferred shares of OAO Surgutneftegas, a Russian oil producer, rallied 3.8 percent. OAO Novatek, Russia’s second-largest natural-gas producer, rose 3.6 percent and Federal Grid Co., Russia’s high-voltage power transmission monopoly, jumped 3 percent. Russia’s biggest lenders, VTB Group and OAO Sberbank, added 2 percent and 2.2 percent, respectively.
Oil, Russia’s main export revenue earner, was up as much as 1.7 percent at $97.60 a barrel in New York as China moved to alleviate a cash crunch and before U.S. reports that are expected to show the world’s biggest economy is improving. Speculation that the European Union’s debt crisis and China’s slowdown will curtail growth bolstered bets that central banks will continue to support the global economic recovery.
“Oil is up nicely, this is especially positive for Russia,” Neil Shearing, chief emerging-markets economist at Capital Economics in London, said by phone. “When oil rallies, Russian equities rise. There’s optimism in the markets that the European Central Bank will take further steps to save the EU.”
The Micex has rebounded 16 percent from this year’s lowest level on May 23.
Luxembourg Prime Minister Jean-Claude Juncker, the head of the euro group of finance ministers, visits Greece tomorrow. German Chancellor Angela Merkel and French President Francois Hollande meet in Berlin on Aug. 23, before holding separate talks with Greek Prime Minister Antonis Samaras later in the week.
“Fears about the global recession seem to be receding,” Shearing said.
The dollar-denominated RTS Index surged 2.8 percent to 1,442.72, the most since Aug. 3.
OAO Rosneft, Russia’s biggest oil producer, increased 1.6 percent to 201.70 rubles, the most since Aug. 7, while OAO Gazprom, the natural gas export monopoly, added 1.5 percent to 156.88 rubles.
X5 Retail Group climbed 3.5 percent to $20.86, the highest intraday level since July 24. Russia’s biggest food retailer by revenue gained in London as second-quarter ruble sales rose on new stores.
The Standard & Poor’s GSCI Spot Index of 24 raw materials rose as much as 1.5 percent to the highest intraday level since May 3. Commodities are poised to enter a bull market on mounting optimism growth in the U.S. and stimulus from China will boost demand.
Copper, nickel and tin rallied on the London Metal Exchange. Steelmakers advanced, with OAO Magnitogorsk Iron & Steel adding 2.5 percent to 10.161 rubles and OAO Novolipetsk Steel, Russia’s biggest steelmaker by market value, rising 2.2 percent to 58.33 rubles.
Polymetal International Plc rose 4.1 percent to $965 in London, the highest intraday level since April 23.
The S&P 500 gained 0.2 percent to 1,421.10 at 9:54 a.m. in New York, surpassing the four-year closing high of 1,419.04 reached on April 2.
“We expect the market growth to continue along with that of the global markets,” Ovanes Oganisian, a strategist at Troika Dialog in Moscow, said by phone.
MSCI Inc.’s Emerging-Markets Index rose 1 percent to 978.66, heading for the biggest advance since Aug. 6.
The Micex trades at 3.5 times estimated earnings after gaining 3.7 percent this year. That compares with a multiple of 9.7 times for the MSCI Emerging Markets Index, which has added 6.8 percent.
Russian equities have the lowest valuations based on estimated earnings among 21 emerging markets tracked by Bloomberg.