June 13 (Bloomberg) -- Russia’s benchmark equity gauge dropped to the weakest level in more than a year as energy shares slumped on concern global growth may falter, curbing demand for commodities.
The Micex Index declined 1.5 percent to 1,281.89 by the close in Moscow, the lowest level since May 25, 2012 and an 18 percent drop from this year’s January high. OAO Gazprom, the natural-gas export monopoly, tumbled 1.6 percent to 110.14 rubles, the lowest since January 2009. OAO Lukoil, the second-largest oil producer, retreated 0.8 percent to 1,848.30 rubles.
Stocks slumped and commodities declined as the World Bank cut its global growth forecast yesterday amid concern central banks may pare monetary stimulus. The U.S. Federal Open Market Committee meets next week after the Bank of Japan this week left its lending program unchanged. Russia kept its main rates on hold for a ninth month at a meeting this week.
“The forecast cut is contributing to the selloff today,” Stanislav Kopylov, who helps manage about $3 billion at UralSib Asset Management in Moscow, said by phone today. “Investors were aware of the economic slowdown and yesterday’s decision further dimmed the outlook.”
The dollar-denominated RTS Index, which entered a bear market last week, declined as much as 1.8 percent, closing down 0.2 percent at 1,261.63. The Standard & Poor’s GSCI gauge of 24 raw materials retreated 0.2 percent. Urals crude, Russia’s major export blend, retreated 0.2 percent to $102.59.
On the Micex, 13 stocks increased while 37 dropped. The volume of shares traded on the gauge was 30 percent below the 30-day average, while 10-day price swings rose to 20.456.
Bank Rossii held its refinancing rate at 8.25 percent, the regulator said in a statement on its website on June 10. That matched the median estimate in a Bloomberg survey of 26 economists, with four predicting a quarter percentage point cut. Inflation in Russia accelerated for a second month in May to the fastest pace in 21 months, according to data last week.
OAO Sberbank, Russia’s largest lender with the second-biggest weighting on the Micex at 14 percent, slumped 3.1 percent to 91.76 rubles, the lowest level since Nov. 30. Smaller rival VTB Group lost 1.7 percent to 4.65 kopeks.
“Although Sberbank is a decent bank, we recommend investors sell it because it’s facing earnings risks,” Alexei Yazikov, head of research at Aton Capital LLC, said by phone from Moscow. The share of Sberbank’s non-performing loans rose to 2.87 percent in May from 2.82 percent a year ago, according to a statement from the Moscow-based bank June 7.
Most metals fell in London. OAO GMK Norilsk Nickel, the world’s biggest producer of the metal, declined 1.8 percent to 4,389 rubles, the lowest since July 2010. OAO Severstal dropped 0.3 percent to 216.10 rubles, the lowest level since November 2009. OAO Novolipetsk Steel retreated 0.8 percent to 41.58 rubles, the lowest since April 2009.
This week’s central bank meeting was the last scheduled rate gathering before Kremlin economic aide Elvira Nabiullina takes over June 24 as chairman. The Economy Ministry lowered this year’s growth forecast to 2.4 percent from 3.6 percent in April.
The world economy will expand 2.2 percent, less than a January forecast for 2.4 percent growth and slower than last year’s 2.3 percent, the World Bank said in a report released yesterday in Washington. It lowered its prediction for developing economies and sees the euro region’s gross domestic product shrinking 0.6 percent.
The Micex tumbled the most in a year on May 23, the day after Federal Reserve Chairman Ben S. Bernanke suggested the central bank could curtail its bond buying if the job market improves in a “real and sustainable way.” The Fed buys $85 billion of debt a month to support the economy by putting downward pressure on interest rates.
The 14-day Relative Strength Index on the Micex sank to 31.4 from 34 on June 11. A level below 30 suggests to some analysts the shares are oversold and poised for a rebound.
Seven companies on the Micex closed on June 11 at 52-week lows, while no companies closed at 52-week highs, according to data compiled by Bloomberg.
The country’s equities have the cheapest valuations among 21 emerging markets tracked by Bloomberg. The Micex trades at 4.8 times its 12-month estimated earnings, having lost 13 percent this year, compared with a multiple of 9.7 for the MSCI Emerging Markets Index, which is down 11 percent.
The Russian Volatility Index advanced 11 percent to 32.69. The Bloomberg Russia-US Equity Index of the most-traded Russian companies in the U.S. was little changed at 83.92.
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