Russian equities fell as OAO GMK Norilsk Nickel and United Co. Rusal retreated after Morgan Stanley downgraded the nation’s biggest miners, citing valuations.
The Micex Index declined 0.2 percent to 1,533.77 by the close in Moscow after rising 0.8 percent yesterday. Of the 50 stocks in the gauge, 12 advanced and 38 slid. The RTS Index, Russia’s dollar-denominated equity gauge, was little changed at 1,604.65. OAO Sberbank, the nation’s largest lender and the biggest stock by weighting in the Micex, dropped 0.9 percent.
Morgan Stanley cut Norilsk to the equivalent of hold, and Rusal to the equivalent of sell, citing share-price gains. Rusal climbed to an almost seven-month high on Jan. 10 after Vladimir Potanin and the aluminum company controlled by billionaire Oleg Deripaska last month settled a battle for control that lasted more than four years. Nickel and copper fell on the London Metal Exchange.
“We’re seeing investors take profits on yesterday’s gains,” Valentina Bogomolova, an analyst at UralSib Capital, said by phone from Moscow. “Metals are declining, pushing the metal producers down.”
Rusal lost 1.9 percent to 188.63 rubles, while Norilsk declined 0.7 percent to 6,045 rubles. Norilsk has the fifth-largest weighting on the Micex at 5.6 percent.
“We believe UC Rusal’s recent rally fully reflects the benefits from resolution of shareholder conflict with Norilsk Nickel,” Dmitriy Kolomytsyn, an analyst at Morgan Stanley, said in an e-mailed report today. “Norilsk Nickel has run out of steam for now.”
Emerging-market stocks fell to a one-week low on weaker sales growth at Apple Inc. The company posted the slowest profit growth since 2003 and the weakest sales increase in 14 quarters yesterday.
The amount of shares traded on the Micex was 16 percent above the 30-day average, data compiled by Bloomberg show. The Micex’s 10-day volatility climbed to 12.442.
Crude oil climbed 0.8 percent to $95.95 in New York. Russia receives about half of its budget revenue from oil and natural gas. Standard & Poor’s GSCI Index of Commodities was little changed at 662.38.
U.S. lawmakers voted to lift the nation’s debt ceiling through mid-May as a Bloomberg poll showed global investors say the state of the American government’s finances is the greatest risk to the world economy.
The Market Vectors Russia ETF, the largest dedicated Russian exchange-traded fund, increased 0.6 percent to $30.63, the highest level since Jan. 2. The RTS Volatility Index, which measures expected swings in the stock futures, declined 0.6 percent to 20.33.
Polyus Gold International Ltd. headed for a record one-day surge on a report billionaire Mikhail Prokhorov’s Onexim Holdings Ltd. agreed to sell his entire 37.8 percent stake in the gold producer to a group of investors. Polyus added 9.2 percent to 217.50 pence in London and the company’s Russian unit rose 3.6 percent to 1,134.40 rubles in Moscow.
Onexim and the investors have requested approval from the U.K. takeover panel for the deal’s structure, said three people with knowledge of the plan, asking not to be identified as the information is confidential. They didn’t name the buyers for Prokhorov’s 38 percent of the London-traded gold producer.
The Micex trades at about 5.7 times estimated earnings and has added 4 percent this year. That compares with a multiple of 10.8 times for the MSCI Emerging Markets Index, which has gained 1.7 percent this year.
Russian equities have the lowest valuations based on estimated earnings among 21 emerging markets tracked by Bloomberg.