Oct. 24 (Bloomberg) -- Russian stocks slid to the lowest in more than a week as oil fell and concern Europe’s economic crisis is deepening pared investor appetite for riskier assets.
The Micex Index sank 0.3 percent to 1,451.61 by the close in Moscow, the lowest since Oct. 15. OAO Lukoil, the biggest non-state oil company with the second-largest weighting in the gauge, lost 1.1 percent. OAO EON Russia, a power producer controlled by Germany’s biggest utility, tumbled 5.8 percent.
Emerging-market stocks slid to a two-week low as German business confidence unexpectedly fell to the lowest in more than 2 1/2 years and a report showed euro-area services and manufacturing contracted more than economists estimated. Russia scrapped a planned sale of 30 billion rubles ($956 million) of seven-year bonds today for the first time since May, after investors sought higher yields than the government offered.
“Weakness in German business confidence could lead to lower economic expansion estimates for Russia next year,” Erik DePoy, an equity strategist at Gazprombank, said by e-mail. Europe is Russia’s biggest trading partner.
Oil fell 1 percent to $85.83 a barrel in New York. Crude and natural gas contribute about 50 percent of Russia’s state revenue. The Standard & Poor’s GSCI Spot Index of 24 raw materials lost 0.2 percent, dropping for a fourth day.
Stocks advanced earlier after a preliminary reading of Chinese manufacturing boosted bets that the country’s growth was picking up.
OAO Rosneft, the country’s biggest oil producer, surged 3.9 percent to 234.54 rubles, the most in a month, after Bank of America Merrill Lynch lifted the stock to buy, citing the company’s planned acquisition of OAO TNK-BP Holding.
Bank of America analysts, led by Karen Kostanian, increased the price target to $9 from $8 per global depositary receipt, citing increased earnings per share as a result of the deal and low valuations, in an e-mailed report yesterday.
The Micex trades at 5.5 times estimated earnings after gaining 3.5 percent this year. That compares with a multiple of 10 times for the MSCI Emerging Markets Index, which has added 8.6 percent.
Russian equities have the lowest valuations based on estimated earnings among 21 emerging markets tracked by Bloomberg.
To contact the reporter on this story: Jason Corcoran in Moscow at email@example.com;
To contact the editor responsible for this story: Frank Connelly at firstname.lastname@example.org