Russian stocks rose, sending the benchmark index to the biggest gain in almost two weeks, as steelmakers climbed on speculation central banks from China to the U.S. may take steps to boost growth.
The Micex Index added 1.2 percent to 1,439.31 by the close in Moscow, the first increase in four days and the most since Aug. 21. OAO Severstal gained 2.8 percent, OAO Magnitogorsk Iron & Steel rallied 2.1 percent and OAO Novolipetsk Steel rose 1.7 percent as metals gained. Power companies increased, with OAO MRSK Holding rising 1.5 percent and OAO Mosenergo gaining 1.2 percent, as Russia lifted energy tariffs for the second time this year on Sept. 1.
China’s factory output unexpectedly shrank for the first time in nine months in August as orders decreased, a government survey showed Sept. 1. Federal Reserve Chairman Ben S. Bernanke said Aug. 31 that he wouldn’t rule out more stimulus as the U.S. jobless rate remained a “grave concern.”
“We’re seeing temporary optimism in the markets today,” Alexey Dyakonov, an analyst at Quorum Asset Management, a hedge fund that manages about $250 million in Russian and CIS equities, said by phone from Moscow. “Although Bernanke didn’t promise any concrete stimulus steps, the market is divided into two groups -- those who believe in further stimulus and those who don’t. It’s a tug of war.”
The dollar-denominated RTS Index rose 1.2 percent to 1,406.04, the biggest advance since Aug. 21.
All metals on the London Metal Exchange climbed, with copper climbing 1 percent, zinc gaining 1.9 and nickel up 2.1 percent.
Crude oil, Russia’s chief export earner, was little changed at $96.54 in New York, after rising 2 percent on Aug. 31. Oil and gas contribute about 50 percent to Russia’s state revenue. Brent crude rallied 0.6 percent to $115.28.
Bernanke, with a little more than a year left in his second term, defended the effectiveness of unconventional monetary policies such as bond purchases and signaled he would soon deploy them again to attack unemployment.
“Chairman Bernanke’s justification of the merits of the non-conventional monetary policies maintains the expectation for QE3 to materialize sooner rather than later,” VTB Capital analysts led by Alexei Zabotkin said in an e-mailed note today.
Russia’s manufacturing declined in August following weaker new orders growth, HSBC Holdings Plc said today. The Russian purchasing managers’ index fell to 51 in August from 52 in July, HSBC said in a statement posted on the website of Markit Economics. A level above 50 signals manufacturing conditions improved in the month.
The country’s unemployment rate has fallen to 5.1 percent after the government stepped in to protect the labor market following the 2008-2009 crisis, President Vladimir Putin said today. Unemployment was 5.4 percent in July, according to the latest data from the Federal Statistics Service.
Preferred shares of oil producer OAO Surgutneftegas rose 1 percent to 21.06 rubles. The stock climbed 11 percent in August, the biggest advance in the Micex. Morgan Stanley initiated coverage of the shares with an equalweight recommendation, according to today’s report.
OAO Gazprom Neft, an oil producer, gained 0.5 percent to 152.22 rubles, a two-week high. Morgan Stanley raised the stock to overweight, or the equivalent of buy.
Polyus Gold International Plc climbed 0.4 percent to 975.10 rubles in Moscow and rose 3.1 percent to 202.75 pence in London. VTB Capital reiterated its buy recommendation and raised the 12-month price estimate 4 percent to 260 pence on better-than-estimated cost control, according to a report. The gold producer’s first-half gold sales jumped 36 percent to $1.22 billion, beating VTB’s estimates.
Russian equity funds attracted $90 million in the week ended Aug. 29, according to VTB Capital’s research note on Aug. 31, which cited EPFR data.
The Micex trades at 5.3 times estimated earnings and has rallied 2.6 percent this year. That compares with a multiple of 9.9 times and a 3.9 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.