Russian shares slid to the lowest level since June as crude oil dropped after economic growth unexpectedly slowed in China, curbing demand for stocks in the world’s biggest energy exporter. Volatility surged.
The Micex Index sank 1.9 percent to 1,359.69 by the close in Moscow, the lowest level since June 28 and a 13 percent retreat from this year’s high on Jan. 28. The gauge fell 2.2 percent last week. Trading volumes were 40 percent above the 30-day average, while 10-day price swings advanced to 15.313, the highest since March 28.
Crude, Russia’s biggest export earner, lost 3.5 percent to $88.09 per barrel in New York, trading below $90 a barrel for the first time this year. In China, the world’s second-largest crude consumer, gross domestic product rose 7.7 percent in the first quarter, the National Bureau of Statistics said in Beijing. That compared with an 8 percent median forecast by analysts in a Bloomberg News survey and 7.9 percent in the fourth quarter.
“Poor Chinese data hits Russia hard because we’re an oil-producing, commodities-dependant country,” Ilya Mozgovoy, who helps oversee about $1 billion in assets as the head of asset management at Allianz Investments in Moscow, said by phone. “Energy, metal stocks are influenced by Chinese demand.”
The dollar-denominated RTS Index declined 2.8 percent to 1,366.53, the lowest since Nov. 13.
OAO Mechel, Russia’s biggest coking coal producer, fell as much as 14 percent before closing down 5.3 percent at 124 rubles, the lowest level since March 2009. The company today reported a fourth-quarter net loss of $1.11 billion, compared with a $54.9 million profit in the third quarter, according to a statement today. Mechel’s 2012 net loss was $1.66 billion compared with profit of $728 million in 2011. The company took an impairment charge of $1.63 billion.
Utilities stocks lost 3.2 percent as an industry group. Federal Grid Co. retreated as much as 13 percent before closing down 3.9 percent to 11.19 kopeks. OAO OGK-2, the Russian wholesale power generator controlled by OAO Gazprom, slumped 6.7 percent to 25.06 kopeks. The company’s sales in 2012 were 104.2 billion rubles, below the estimated 106.4 billion rubles.
The relative strength index on the Micex was at 23.5. A value below 30 signals the index is oversold and may reverse losses. The Standard & Poor’s GSCI Index of commodities retreated 2.6 percent to 607.29.
The Russian Depositary Index tumbled 2.9 percent to 1,571.15. OAO Severstal’s depositary receipts dropped 6.5 percent to $7.72. The stock declined 5.7 percent to 242.50 rubles in Moscow, the lowest since December 2009.
The RTS Volatility Index, which measures expected swings in stock futures, jumped 14 percent to 24.20, the sixth day of gains. The Market Vectors Russia ETF, the largest dedicated Russian exchange-traded fund, lost 3.1 percent to $26.26 today The Bloomberg Russia-US Equity Index decreased 3.1 percent to 91.43.
Russian equities have the cheapest valuations among 21 emerging markets tracked by Bloomberg. The Micex trades at 5 times estimated earnings and has lost 7.8 percent this year, compared with 10.1 times for the MSCI Emerging Markets Index, which has slid 4.5 percent this year.