Russian shares dropped to a two-month low on concern the U.S. will curb bond purchases that injected cash into the financial system and as crude oil fell. Volatility increased to the highest in a month.
The Micex Index declined 1.2 percent to 1,493.71 by the close in Moscow, the lowest level since Dec. 28, with two stocks up and 48 down. Industrial shares lost 2.8 percent on average. The dollar-denominated RTS Index retreated 2.1 percent to 1,548.76.
Oil, Russia’s main export earner, fell 2.2 percent to $93.14 a barrel in New York. Russia receives about half of its budget revenue from oil and natural gas. Minutes from the U.S. Federal Reserve’s last meeting released yesterday showed policy makers were divided over the risks and benefits of the $85 billion in monthly asset buying.
“The Fed minutes caused a sell-off in global equities and Russia is no exception,” Dmitry Mikhailov, who manages $130 million in assets at Renaissance Capital in Moscow, said by phone today. “The appetite for risky assets disappeared overnight.”
OAO Mechel, Russia’s largest coking coal producer, dropped 3.8 percent. VTB Group, the country’s second-biggest lender, retreated 4.2 percent. OAO Novorossiysk Commercial Sea Port declined 4.4 percent, the most since June 14, and the biggest drop on the index.
OAO Alrosa surged 1.4 percent to 34.698 rubles, the highest since December 2011. Goldman Sachs Group Inc. was picked to handle the Russian government’s sale of a 7 percent stake in the diamond miner, Economy Ministry said in a website statement today.
Ten-day price swings on the Micex spiked to 15.443, the highest since Jan. 18, while the number of shares traded on the gauge was 134 percent above the measure’s 10-day average, data compiled by Bloomberg show. The ruble weakened 0.6 percent against the dollar to 30.36.
Standard & Poor’s GSCI Index retreated 1.6 percent to 657.91 as all metals dropped in London. The Russian Depositary Index fell 2.4 percent, the most intraday since Nov. 13, led by depositary receipts of AFK Sistema, billionaire Vladimir Evtushenkov’s holding, plunged 5.9 percent.
OAO Transcontainer sank 3.5 percent in London as the rail-freight operator approved paying 25 percent of profit in dividends, it said in an e-mailed statement today. Transcontainer’s 2011 dividends were equal to 35 percent of net income, according to Rye, Man & Gor Securities e-mailed note.
The Micex trades at about 5.6 times estimated earnings and has added 1.3 percent this year. That compares with a multiple of 10 times for the MSCI Emerging Markets Index, which has lost 0.4 percent over the same period.
The Market Vectors Russia ETF, the largest dedicated Russian exchange-traded fund, declined 2.6 percent to $29.48 yesterday. The RTS Volatility Index, which measures expected swings in futures, increased 5.2 percent to 21 points. The Bloomberg Russia-US Equity Index of the most-traded Russian stocks in the U.S. lost 1.2 percent.