Russian equities retreated as oil, the country’s main export, declined and concern Europe’s debt crisis is deepening curbed appetite for riskier assets.
The Micex Index sank 0.7 percent to 1,530.38 by the close in Moscow after rising as much as 0.8 percent. Of the 50 stocks in the gauge, 37 fell and 13 rallied. The dollar-denominated RTS Index dropped 0.7 percent to 1,602.99. OAO Gazprom, the country’s natural-gas export monopoly, fell 1.2 percent. OAO Lukoil, its second-biggest oil producer, decreased 0.6 percent.
European and U.S. stocks fell before European Central Bank President Mario Draghi heads a meeting of policy makers tomorrow in Frankfurt as euro-area leaders gather for a summit in Brussels. Oil sank 1.2 percent to $95.44 a barrel in New York. Crude and natural gas account for about 50 percent of Russian government revenue.
“We turned around, following U.S. futures on concern before the ECB meeting,” Pavel Dorodnikov, head of trading at Rye, Man and Gor Securities said by phone today.
OAO Aeroflot, Russia’s biggest airline, surged 1.3 percent to 54.13 rubles as passenger volume jumped 25 percent in 2012 from a year earlier, the company said in a statement today.
Euroclear Bank SA announced it will start direct settlement of ruble-denominated government debt tomorrow, opening the $100 billion so-called OFZ market to foreign investors.
The opening of the debt market should “encourage investors to think about trading the Micex through Euroclear” next year, Julian Rimmer, a trader of Russian and Turkish stocks at CF Global Trading in London, said in e-mailed comments.
Equities won’t be Euroclearable until July 2014 because officials are concerned an increase in outside investors will hurt liquidity, Oksana Derisheva, deputy director of the primary market at the exchange, said in an interview on Nov. 16 in Moscow.
The Market Vectors Russia ETF, the largest dedicated Russian exchange-traded fund, dropped 0.8 percent to $30.48. The RTS Volatility Index, which measures expected swings in the stock futures, rose 0.3 percent 20.32. The number of shares traded on the Micex was 31 percent above the 10-day average, data compiled by Bloomberg show.
The Micex trades at about 5.7 times estimated earnings and has added 3.8 percent this year. That compares with a multiple of 10.3 times for the MSCI Emerging Markets Index, which has gained 0.7 percent over the same period.
Russian equities have the lowest valuations based on estimated earnings among 21 emerging markets tracked by Bloomberg.