Russia’s benchmark equity gauge snapped thee days of declines, rebounding from the lowest level in more than a year as consumer companies led gains.
The Micex Index added 1.4 percent to 1,299.61 by the close in Moscow, paring its fifth weekly loss to 3.3 percent. The 14-day relative strength index on the Micex climbed to 36.756 from 31.4 yesterday, the closest since April to a level of 30, which signals a rebound to some analysts. OAO Magnit, Russia’s biggest food retailer, surged 3.8 percent to 7,102 rubles.
Russian equity indexes will climb between 20 percent and 30 percent by the end of 2013 on higher earnings and dividend payouts, Vladimir Potapov, chief executive officer at VTB Capital Investment Management, said in an interview June 11. Crude oil, Russia’s chief export earner, added 1.3 percent to $97.92 a barrel in New York today.
Better-than-expected data from the U.S. yesterday had “a positive impact on the investor sentiment toward the Russian market,” Vladimir Savov, an equities strategist at Otkritie Capital in Moscow, said by phone. “We’re bouncing back today.”
The dollar-denominated RTS Index, which entered a bear market last week, rose 2.6 percent to 1,293.88. Urals crude, Russia’s main export blend, added 0.1 percent to $104.37. Brent crude increased 1.9 percent to $106.24.
On the Micex, 30 stocks increased while 20 dropped. The volume of shares traded on the gauge was 31 percent below the 30-day average, while 10-day price swings rose for a second day to 23.144.
Magnit’s global depositary receipts jumped 5.5 percent to $56.95 in London. OAO Aeroflot, Russia’s biggest airline, increased 3.8 percent to 53.43 rubles.
Bank Rossii held its refinancing rate at 8.25 percent 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.
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.
“We’re expecting a rate cut next month,” Savov said. “If we don’t see one, it’ll have a negative effect on the market.”
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 on June 12. 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.
Institutional funds sold $446 million in Russian stocks, while other passive funds posted $397 million in redemptions in week ended June 12, according to an e-mailed note from Sberbank CIB, citing EPFR Global.
The Standard & Poor’s GSCI gauge of 24 raw materials climbed 0.9 percent to 631.88. OAO GMK Norilsk Nickel, the world’s biggest producer of the metal, rose 4.5 percent to 4,587 rubles, the strongest gain on the Micex, after falling to the lowest since July 2010 yesterday.
OAO Novatek, the nation’s second-biggest natural-gas producer, jumped 3.7 percent to 315.06 rubles, the largest advance since May 22. Novatek increased 5.4 percent to $110.10 in London. Reuters reported yesterday that China Petroleum and Chemical Corp., known as Sinopec, may sign an agreement next week to join a $20 billion liquefied natural gas project run by Novatek in Yamal, citing unidentified people in Moscow.
Eleven companies out of 50 on the Micex closed yesterday at 52-week lows, while no companies closed at 52-week highs, according to data compiled by Bloomberg. Eleven stocks, or 22 percent, were trading above their 50-day moving average.
The country’s equities have the cheapest valuations among 21 emerging markets tracked by Bloomberg. The Micex trades at 4.9 times its 12-month estimated earnings, having lost 12 percent this year, compared with a multiple of 9.8 for the MSCI Emerging Markets Index, which is down 9.6 percent.
The Russian Volatility Index tumbled 7.5 percent to 30.56. The Bloomberg Russia-US Equity Index of the most-traded Russian companies in the U.S. increased 0.8 percent to 85.49 today.