Russian oil and gas companies drove the benchmark stock index to a three-month low as crude oil retreated for a second day and investors sold riskier assets after European officials delayed a decision on Greek aid.
The Micex Index dropped 2.4 percent to 1,373.83 by the close in Moscow, the lowest level since July 25. Utilities, consumer services and oil and gas stocks tumbled the most, losing at least 2.7 percent on average. OAO Surgutneftegas dropped 3.3 percent, while OAO Gazprom, Russia’s biggest company and natural gas producer, slumped 3.6 percent. Power stocks OAO MRSK Holding and Federal Grid Co. dived 5.2 percent and 4 percent, respectively.
Oil, Russia’s main export earner, sank 0.6 percent to $85.06 a barrel, declining for a second day. Russia receives about half of its government revenue from oil and natural gas. Euro-area finance ministers put off until Nov. 20 a decision on how to cover Greece’s need for additional financing of as much as 32.6 billion euros ($41 billion).
“Weakening oil is a negative factor for the Russian market,” Yaroslav Lissovolik, head of research at Deutsche Bank AG in Moscow, said by phone. “The Greek problems remain. The delay in talks is fueling growth concern among Russian investors.”
The volume of shares traded on the Micex was 24 percent above the 10-day average, according to data compiled by Bloomberg.
Standard & Poor’s GSCI Index of 24 commodities slid 0.4 percent to 631.99.
Russia’s economy expanded in the third quarter at the slowest pace since its recovery began at the start of 2010 as droughts ravaged crops, slowing growth in China and the slump in Europe curbed demand for shipments of oil, natural gas and metals.
Euro-area finance ministers’ meeting in Brussels late yesterday gave Greece until 2016 to trim its budget deficit to 2 percent of gross domestic product, pledging to plug the resulting financing gap to prevent the country from exiting the single currency.
OAO Novolipetsk Steel dropped 1.7 percent to 59.13 rubles, the lowest since Oct. 31. Societe Generale SA cut the stock to sell from hold, citing a “worsened” financial outlook for 2013 steel prices, according to an e-mailed report.
Russian equities will be accessible to Euroclear Bank SA clients starting from early 2014, Moscow Exchange Chief Executive Officer Alexander Afanasiev said at a conference in London today.
Russia made the National Settlement Depository a central depositary on Nov. 6, clearing one of the last barriers for foreign investors to buy and sell ruble-denominated debt through Euroclear, the world’s biggest bond settlement system.
The Micex trades at 5.3 times estimated earnings after falling 1.8 percent this year. That compares with a multiple of 10 times for the MSCI Emerging Markets Index, which has added 6.9 percent.
Russian equities have the lowest valuations based on estimated earnings among 21 emerging markets tracked by Bloomberg.