Russian equities fell the most in a year as tumbling crude oil drove stocks in the world’s biggest energy exporter to the worst performance among emerging markets. Price swings on the benchmark gauge rose to an eight-month high.
The Micex Index decreased 3.6 percent to 1,396.91 by the close in Moscow, an 11 percent drop from this year’s high and the biggest retreat since May 2012. The volume of shares traded was 5.4 percent below the measure’s 30-day average, while 10-day price swings jumped to 28.555, the highest since Sept. 26. OAO Sberbank, Russia’s biggest lender, lost 4.7 percent to 105.62 rubles, the most in a year. The receipts dropped 5.3 percent to $13.50 in London.
OAO Mechel, OAO Severstal and OAO Novolipetsk Steel fell at least 4.6 percent as all metals in London sank after manufacturing in China unexpectedly contracted for the first time in seven months. Crude, Russia’s main export earner, slipped 1.6 percent to $92.78 a barrel in New York. Russia gets about half of its state revenue from oil and natural gas.
“The market is like a roller coaster,” Oleg Popov, who manages about $1 billion in assets for Allianz Investments, the asset management arm of Europe’s biggest insurer, said by phone in Moscow. “There’s too much emotion in stocks right now, Russia has no growth triggers. Our economy is part of the global system, so the Chinese slowdown affects us.”
Mechel, Russia’s biggest coking coal producer, tumbled 4.7 percent to 114.70 rubles. American depositary receipts dropped 2.9 percent to $3.64. NLMK, Russia’s second-biggest steelmaker, declined 5 percent to 46.78 rubles, while its GDRs lost 5.3 percent to $14.96. Severstal retreated 4.6 percent to 266 rubles. The GDRs slid 5 percent to $8.51.
VTB Group traded down 4 percent at 4.78 kopeks after it sold 102.5 billion rubles ($3.3 billion) of shares on the Moscow Exchange in an offering that closed yesterday. VTB’s GDRs fell 4 percent to $3.06 in London.
China Construction Bank bought $100 million of VTB shares in the placement, RIA Novosti reported yesterday, citing an unidentified person. Norges Bank Investment Management was the biggest investor in VTB’s sale, according to RIA. The government stake of 75.5 percent in VTB is expected to fall to 60.93 percent following the placement, VTB said on April 29.
Consumer goods stocks led declines among the nine industry groups on the Micex, losing 8.1 percent on average. OAO Magnit, Russia’s biggest food retailer, retreated 3.9 percent to 7,154.10 rubles. GDRs decreased 3.9 percent to $56.20.
OAO RusHydro fell 4 percent to 52.98 kopeks. GDRs declined 5.4 percent to $1.61. Goldman Sachs Group Inc. cut the stock to neutral from buy, according to an e-mailed note.
Open interest on RTS stock futures climbed to the highest level in eight months yesterday. Volumes surged amid comments from Federal Reserve Chairman Ben S. Bernanke that raising interest rates or reducing asset purchases too soon would endanger the U.S. recovery. The number of contracts that have yet to be closed, liquidated or delivered on Moscow’s dollar-denominated RTS index exceeded 1 million this week, the highest level since September, data compiled by Bloomberg show.
Russia’s equities have the cheapest valuations among 21 emerging markets tracked by Bloomberg. The Micex trades at 5.2 times its 12-month estimated earnings and has lost 5.3 percent this year, compared with a 10.4 multiple for the MSCI Emerging Markets Index, which has dropped 3 percent in the period.
The dollar-denominated RTS Index fell 4.2 percent to 1,400.84, the most since July 23. The RTS Volatility Index, which measures expected swings in stock futures, rose 14 percent to 23.20 today. The Bloomberg Russia-US Equity Index of the most-traded Russian companies in the U.S. declined 2.6 percent to 92.09 today.