Russian stocks fell for the first time in three days as the central bank kept rates on hold and investor appetite for riskier assets declined on concern the U.S. budget dispute may derail an economic recovery.
The 50-stock Micex Index dropped 0.9 percent to 1,515.25 by the close in Moscow. Trading volumes were 30 percent higher than the 30-day average, data compiled by Bloomberg show. OAO Tatneft, the oil producer based in Russia’s Tatarstan region, declined 1.4 percent, while OAO Magnitogorsk Iron & Steel fell 2.3 percent.
Concern about the U.S. economy increased after Treasury Secretary Timothy F. Geithner said government borrowing limits may be breached as early as next month unless Congress raises the debt ceiling. Bank Rossii left borrowing costs unchanged, holding the refinancing rate at 8.25 percent for a fourth month, the Moscow-based central bank said in a statement on its website today. The decision was forecast by all 19 economists in a Bloomberg survey.
“The main issues blocking the bull market are the U.S. delayed fiscal solutions,” Mark Rubinstein, head of research at IFC Metropol, said in an e-mailed report today.
Financial markets “could go haywire” if lawmakers don’t raise the government’s debt limit, President Barack Obama said at a White House news conference yesterday.
OAO Sberbank, Russia’s largest lender, dropped the most in two weeks, losing 1 percent to 99.98 rubles. Profit last year rose 11 percent to 344 billion rubles ($11.4 billion), the bank said.
OAO Sollers, an automaker, surged 7.9 percent to 774.40 rubles. Russian car and light commercial vehicle sales rose 10.6 percent to 2.94 million in 2012, Association of European Business committee chairman Joerg Schreiber told reporters in Moscow today.
The Market Vectors Russia ETF, the largest dedicated Russian exchange-traded fund, slid 1.1 percent to $29.81. The RTS Volatility Index, which measures expected swings in the stock futures, rose 2.2 percent to 21.09 today.
The Micex trades at about 5.6 times estimated earnings. That compares with a multiple of 10.8 times for the MSCI Emerging Markets Index.
Russian equities have the lowest valuations based on estimated earnings among 21 emerging markets tracked by Bloomberg.