Micex Climbs Led by Rusal on Oil Rally, Stimulus Expectation

Russian stocks rose as oil and metals rallied on speculation central banks in the U.S. and China may add stimulus measures, boosting demand for raw materials.

The Micex Index climbed 0.5 percent to 1,453.50 by the close in Moscow after rising 1.7 percent intraday to the highest in almost four months. United Co. Rusal, the world’s biggest aluminum producer, added 2.2 percent, while OAO Severstal increased 1.4 percent. Preferred shares of OAO Surgutneftegas grew 1.7 percent as crude oil advanced.

Oil rose 0.4 percent to $97.67 barrel in New York trading, gaining for a third day. Minutes from the Federal Open Market Committee’s July 31-Aug. 1 meeting showed many members judged that additional stimulus “would likely be warranted fairly soon” unless the pace of the U.S. economic recovery picks up.

“The Russian market is being driven by the Fed’s monetary stimulus hints,” Andrey Kuznetsov, an equities analyst at Citigroup Inc. in Moscow, said by phone. “Oil is also reacting to the stimulus hopes, supporting the Russian equities.”

People’s Bank of China Governor Zhou Xiaochuan said yesterday that adjustments to interest rates and banks’ reserve requirements are still possible after the central bank stepped up temporary cash injections this month. Both China and the U.S. are major importers of metals, energy and grains.

Commodities Surge

The Standard & Poor’s GSCI Index of commodities advanced as much as 0.8 percent to 682.35, the highest since May 1 on a closing basis. Urals crude, Russia’s main export blend, added 1 percent.

“The Federal Reserve is apparently leaning towards quantitative easing,” Slava Smolyaninov, an equity analyst at UralSib Financial Corp, wrote in an e-mailed report today. “Supported by an almost 1 percent gain in oil, we believe there might be some optimism today.”

The Micex pared gains after a U.S. report showed the number of Americans filing applications for unemployment benefits climbed last week to a one-month high, showing little progress in the labor market.

Petropavlovsk Plc slumped 17 percent to 389 pence in London. The miner of gold in Russia fell the most since April 2009 after reporting a 90 percent drop in net income to $11 million.

Gazprom, Novatek

OAO Gazprom, the natural gas export monopoly, advanced 0.4 percent to 157.18 rubles. OAO EON Russia rose 0.5 percent to 2.73 rubles. OAO Novatek gained 0.6 percent to 366.74 rubles, after adding as much as 2 percent earlier.

EON Russia, a power producer controlled by Germany’s biggest utility, will let gas supply with Gazprom expire this year in favor of the state-run company’s competitors.

The unit of EON AG will buy most of its fuel from Novatek, Russia’s second-biggest gas company, starting from next year, Anna Martynova, a spokeswoman for the generator, said by phone in Moscow today.

The Micex trades at 5.1 times earnings after gaining 3.7 percent this year. That compares with a multiple of 11.8 times for the MSCI Emerging Markets Index, which has added 6.3 percent.

Russian equities trade at the cheapest valuations among 21 emerging markets tracked by Bloomberg. Oil and gas contribute about 50 percent to the government’s revenue.

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