Russian shares advanced for the first time in four days as crude oil advanced and better than expected data in the euro region lifted appetite for equities in the world’s biggest energy exporter.
The 50-stock Micex Index climbed 1.4 percent to 1,484.22 at the close in Moscow, with 41 stocks up, seven down and two unchanged. OAO Severstal, billionaire Alexey Mordashov’s steelmaker, climbed for the first time in six days after saying it sees signs of recovery this year.
Brent oil added 0.8 percent to $110.88 a barrel in London. Crude and natural gas exports contribute about 50 percent of Russia’s government revenue. Euro-area factory and services output shrank less than initially estimated, with an index based on a survey of purchasing managers in the euro-area dropping to 47.9 in February from 48.6 in January, according to Markit Economics. That beat a Feb. 21 estimate of 47.3. Euro-area retail sales in the fourth quarter declined 1.3 percent from a year earlier, while analysts surveyed by Bloomberg had expected a 2.9 percent slump.
“External factors, primarily business activity numbers from the euro-zone, influenced the trading in Russia,” Anton Startsev, chief analyst at Olma Investment Firm, said in an e-mailed note.
Severstal added 1.6 percent to 335.90 rubles after saying it expects improvement in steel, iron ore and coking cole prices. Global steel market growth may be 2 percent to 3 percent, Mordashov said on a conference call today. The company posted a net loss of $150 million in the fourth quarter as prices declined.
“While Severstal’s numbers are set to look weaker versus peers in the fourth quarter, we continue to view the stock as a better option for longer term exposure to the sector due to its healthy balance sheet, balanced integration and discipline in dividend payments,” VTB Capital analyst Igor Lebedinets said in an e-mailed note.
Russian equities have the lowest valuations based on estimated earnings among 21 emerging markets tracked by Bloomberg.
The Market Vectors Russia ETF, the largest dedicated Russian exchange-traded fund, rose 1.5 percent to $28.90 snapping three days of declines. The RTS Volatility Index, which measures expected swings in the stock futures, dropped 9.3 percent to 21.47.
The Micex trades at about 5.6 times estimated earnings after gaining 0.8 percent this year. That compares with a multiple of 10.5 times for the MSCI Emerging Markets Index, which is down 0.3 percent in 2013.