Russian stocks advanced the most in two months as crude oil, the nation’s chief export earner, climbed and as the European Central Bank agreed to a bond-purchase program.
The Micex Index jumped 2.4 percent to 1,455.07 by the close in Moscow, the biggest increase since July 3. OAO Mechel, Russia’s largest coking coal producer, gained 5.5 percent, while OAO Severstal added 3.7 percent. Bank stocks rallied, with VTB Group and OAO Sberbank’s preferred shares advancing more than 2.1 percent.
Crude rose 2.1 percent to $97.37 in New York. Oil and gas contribute about 50 percent to Russia’s state revenue. ECB President Mario Draghi said policy makers agreed to an unlimited bond-purchase program.
“Draghi’s comments are telling investors that European policymakers have a roadmap for solving the debt crisis,” Slava Rabinovich, chief executive officer at Diamond Age Capital Advisors, which manages $180 million in Russian assets, said by phone from Moscow. “The fact that we’re finally getting some clarity on these steps is supporting the markets.”
The dollar-denominated RTS Index advanced 3.3 percent to 1,437.37.
Standard & Poor’s GSCI Index of raw materials gained 1.3 percent to 677.18.
Draghi has staked his credibility on the bond plan, telling lawmakers in Brussels this week that the ECB needs to intervene to wrest back control of rates in a fragmented euro-area economy and save the single currency.
Sberbank’s preferred shares climbed 2.2 percent to 70.03 rubles as the ruble strengthened for the third day. A stronger currency encourages Russians to deposit and abstain from converting ruble deposits, Sberbank’s main source of funding.
VTB, Russia’s second-biggest lender, rose 3.6 percent to 5.45 kopeks. VTB Capital said Sberbank remains its “top pick” in Russia, citing the lender’s discount to emerging-market peers in a note today. The stock trades at 6 times estimated earnings.
OAO Gazprom rallied 2.4 percent to 159 rubles, the highest level since July 4. Earlier, the world’s biggest natural-gas producer said first-quarter profit slumped 24 percent on lower export sales and refunds to European customers.
Mail.ru Group Ltd. rose 2.4 percent to $35.84 by 4:02 p.m. in London, heading for the highest level since Aug. 14. Goldman Sachs Group Inc. reiterated its buy recommendation and raised its 12-month price estimate by 9.6 percent to $48, according to an e-mailed report.
The largest Russian-language internet company said yesterday profit in the first half advanced 66 percent compared with the same period last year to 4 billion rubles ($125 million).
OAO Magnit, Russia’s biggest retailer, fell 1.2 percent to 4,227.50 rubles, the only decliner on the index.
The Micex trades at 5.4 times estimated earnings and has rallied 3.8 percent this year. That compares with a multiple of 9.9 times and a 3.6 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.