Russian stocks dropped as oil erased gains and concern global growth is slowing curbed appetite for riskier assets. OAO Inter RAO UES, the state-controlled power generator and exporter, led declines.
The Micex Index retreated 1.2 percent to 1,446.01 by the close in Moscow, the biggest drop since Sept. 26, extending the weekly decline to 2.1 percent. The dollar-denominated RTS Index lost 1.2 percent to 1,472.36. Inter RAO fell 3.9 percent, the biggest drop in three months. Metal producers retreated, with OAO Magnitogorsk Iron & Steel and OAO Novolipetsk Steel declining 3.1 percent and 2.5 percent respectively. OAO GMK Norilsk Nickel, the world’s largest miner of the metal, fell as net income retreated 16 percent in the first half after average prices of the metal dropped.
International Monetary Fund Managing Director Christine Lagarde said growth in advanced economies is “tepid” and that the two main areas of uncertainty are the euro region and the U.S. Crude, Russia’s main export earner, erased a gain of as much as 0.6 percent, trading little changed at $92.10 a barrel in New York.
“The situation is a complete swamp,” Victor Bark, who oversees about $2.8 billion as the head of asset management at Alfa Capital in Moscow, said by phone. “We don’t see a clear-cut growth mechanism in Europe, that’s causing uncertainty. Investors are avoiding risks.”
MD Medical Group Investments Plc, Russia’s largest chain of maternity centers, said its initial public offering of shares in London raised $311 million.
The price was set at $12 a depositary receipt, compared with an indicative price range of $11.25 to $13.50 apiece given Oct. 1, according to a regulatory filing today. The deal valued MD Medical, which operates 12 health-care facilities in various cities, at $900 million, the company said.
OAO MRSK Centre fell to the lowest in six weeks after a court ordered the Russian interregional power distributor to pay 5.1 billion rubles ($165 million) to OAO Novolipetsk Steel, billionaire Vladimir Lisin’s metals company. The stock dropped 1.8 percent to 57.96 kopeks, the lowest level since Aug. 31.
MRSK Centre must pay damages for accepting payment for the use of grids that it had been subrenting from Lipetsk Trunk Grids, according to a ruling from the Moscow Arbitration court yesterday, Evgeny Lukashevich, an NLMK spokesman, said in an e-mailed response to questions.
Russia equity funds posted outflows of $300,000 in the week ended Oct. 10, compared with inflows of $230 million the week earlier, Sberbank Investment Research report said, citing EPFR Global data.
Russia may see a “sharp” slowdown in the fourth-quarter capital outflows, Economy Minister Andrei Belousov said today in Moscow. The ministry estimates as much as $65 billion in total outflows for 2012.
The Standard & Poor’s GSCI Spot Index of 24 raw materials fell 0.7 percent to 666.98. The Russian Depositary Index lost 1.1 percent to 1,648.79.
Credit Suisse Group AG cut its iron ore and coking coal price estimates. “Conservative” demand from China will have “major” negative implications for the commodities and steelmakers, according to a report from the bank. Credit Suisse cut OAO Severstal, Evraz Plc and OAO Raspadskaya to underperform from neutral today.
Stocks pared losses after data showed confidence among U.S. consumers unexpectedly jumped in October to the highest level since before the recession began five years ago.
Magnitogorsk, Russian billionaire Victor Rashnikov’s steelmaker, fell 7.2 percent for the Micex’s biggest weekly decline. OAO Mobile TeleSystems, Russia’s biggest mobile operator, rose 1.4 percent in the week, the biggest gainer.
The Market Vectors Russia ETF, the biggest U.S.-traded exchange-traded fund that holds Russian shares, rose 0.7 percent to $28.89 in New York yesterday.
The Micex trades at 5.5 times estimated earnings after gaining 3.1 percent this year. That compares with a multiple of 10 times for the MSCI Emerging Markets Index, which has added 8.8 percent.
Russian equities have the lowest valuations based on estimated earnings among 21 emerging markets tracked by Bloomberg.