Russian stock futures fell and an index of companies traded in the U.S. pared a weekly decline as investors weighed the prospects for monetary stimulus to be extended with economic data pointing to a slowdown.
Contracts on Moscow’s dollar-denominated RTS Index due in September slid 0.6 percent to 126,870 in U.S. hours. The Bloomberg Russia-US Equity Index of the most-traded Russian stocks in the U.S. added 0.8 percent to 85.51 June 14, led by OAO GMK Norilsk Nickel, the biggest producer of the metal. CTC Media Inc., the Nasdaq-listed Russian television network, fell.
Russia, which counts on income from oil and gas for about half of its budget revenue, is expanding at the slowest pace since 2009, and weakness in emerging markets prompted the World Bank to cut its global growth forecast for 2013 last week. Almost $3 trillion has been erased from the value of global equities since Federal Reserve Chairman Ben S. Bernanke said May 22 the central bank could scale back stimulus efforts should the jobs market outlook show “sustainable improvement.”
“The positive investor sentiment is going to reverse because the world has not all of a sudden become a much different place,” Ilya Kravets, director of investment research at Daniloff Capital LLC in New York, said by phone June 14. “We’ll see a lot of investors taking a wait-and-see approach.”
The Market Vectors Russia ETF, the largest exchange-traded fund dedicated to Russian equities, added 0.3 percent to $25.16 June 14, paring a weekly decline to 0.9 percent. The RTS Volatility Index, which measures expected swings in the stock futures, rose 0.3 percent to 30.66. Russia’s benchmark Micex Index snapped a three-day drop in Moscow.
American depositary receipts of Norilsk rose 4.3 percent to $14.45 in New York, the biggest advance since Dec. 5. The Moscow-traded stock rallied 4.5 percent to 4,587 rubles, or $144.60, rebounding from the lowest since July 2010. Each ADR represents one 10th of a stock.
CTC Media slumped 2.4 percent to $11.82 on June 14, extending its weekly decline to 2.8 percent. The shares have surged 52 percent this year.
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. A June 4 report showed that Russian inflation accelerated for a second month in May to the fastest pace in 21 months, limiting the central bank’s scope to cut interest rates.
Last 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 actual rate cut we expect in August, rather than in July because inflation will fall further at that point,” Vladimir Kolychev, head of research at Societe Generale SA’s OAO Rosbank, said by phone from Moscow. “The trend of an overall economic slowdown remains.”
Russia’s ruble gained 0.7 percent to 31.7290 per dollar June 14 and advanced 0.8 percent to 36.4938 against the dollar-euro basket used by the central bank to manage swings that erode exporter competitiveness.
Crude for July delivery rose 1.2 percent to $97.85 a barrel on the New York Mercantile Exchange June 14. Brent for August settlement increased 0.9 percent to $105.93 a barrel on the London-based ICE Futures Europe exchange. Urals crude, Russia’s major export blend, advanced 1.1 percent to $105.37.
The Hong Kong-traded shares of United Co. Rusal, the world’s largest aluminum producer, had yet to trade, though were being bid for at HK$3.35 as of 11:30 a.m. local time. The MSCI Asia Pacific Index gained 0.9 percent.