Russian stocks fell to the lowest in more than a week as investors sold riskier assets on concern Federal Reserve Chairman Ben Bernanke will not signal additional stimulus measures during his speech tomorrow. OAO Sberbank and VTB Group slumped.
The Micex Index declined 0.5 percent to 1,429.82 by the close in Moscow, the lowest close since Aug. 20. OAO Mosenergo, the Moscow-based power generator controlled by OAO Gazprom, slipped 2.3 percent, while steelmaker OAO Magnitogorsk Iron & Steel retreated 1.8 percent. OAO Magnit, Russia’s biggest food retailer, rose 1.1 percent.
U.S. gross domestic product climbed at a 1.7 percent annual rate from April through June, up from an initial estimate of 1.5 percent, data showed yesterday. Separate data showed Americans signed more contracts to purchase previously owned homes in July. Emerging-market stocks fell after improved data dimmed prospects of Bernanke announcing additional stimulus measures in his address at a symposium in Jackson Hole, Wyoming.
“Investors are waiting for Friday, there’s a general consensus that Bernanke won’t do anything,” Dmitry Malykhin, who oversees $30 million in Russian assets as a chief investment adviser at Moscow-based hedge fund Da Vinci CIS Opportunities, said by phone today. “If Bernanke doesn’t hint at stimulus, we’ll see a strong decline.”
The dollar-denominated RTS Index retreated 1.8 percent to 1,384.26, falling for the fifth day.
Crude oil, Russia’s chief export earner, declined 1.3 percent to $94.25 in New York. Oil and gas contribute about 50 percent to Russia’s state revenue. Brent crude rose 0.2 percent to $112.71.
European Central Bank President Mario Draghi canceled his trip to Jackson Hole to shepherd the ECB’s negotiations over peripheral bond purchases.
“The fact that Draghi isn’t coming made many investors think there won’t be any new stimulus measures,” Malykhin said.
Polyus Gold International Plc rose 0.8 percent to 975.10 rubles, the biggest gain in two weeks. The London-listed gold producer with its main operations in Russia said it seeks to further increase the metal recovery rate at its flagship Olimpiada mine to boost profit.
The company’s gold sales surged 36 percent to $1.22 billion in the first half, the company said today.
Evraz Plc declined 2.1 percent to 226.50 pence in London. First-half net income dropped 81 percent from a year earlier, Russia’s largest steelmaker said today.
Standard & Poor’s GSCI Index tumbled 0.4 percent to 666.08, headed for a two-week low.
Sberbank, Russia’s biggest lender, retreated 1.1 percent to 93.49 rubles as the ruble depreciated for the third day. The lender’s first-half net income fell 0.5 percent to 175.3 billion rubles ($5.5 billion) from 176.1 billion rubles a year earlier, the Moscow-based lender said on its website yesterday.
Sberbank has the third-largest weighting in the index. VTB, Russia’s second-largest lender, dropped 2.3 percent to 5.31 kopeks.
M.Video jumped 4.4 percent to 283.23 rubles, the highest level since February 2011. The Russian electronics retailer plans to pay a record first-half dividend of 30 rubles a share, the company’s Chief Financial Officer Christopher Parks said during a conference call yesterday.
The Micex trades at 5.3 times estimated earnings and has rallied 2 percent this year. That compares with a multiple of 9.8 times and a 3.1 percent advance for the MSCI Emerging Markets Index.
Russian equities have the lowest valuations based on estimated earnings among 21 emerging markets tracked by Bloomberg.