Russian equities pared their second weekly increase as consumer stocks declined and better-than-expected U.S. jobs data spurred wagers the Federal Reserve may taper its quantitative easing program.
The 50-stock Micex Index fell 0.5 percent to 1,342.72 by the close in Moscow for a 0.9 percent increase in the week. The dollar-denominated RTS Index dropped 0.9 percent to 1,268.59. The volume of shares traded on the Micex was 34 percent below the 30-day average. OAO Magnit, Russia’s biggest food retailer and this year’s best-performing stock, retreated 2.8 percent to 7,035 rubles. OAO Raspadskaya, a coal producer, surged 4.8 percent to 34.44 rubles, the biggest advancer.
The Micex erased earlier gains and consumer services shares lost 2.5 percent as U.S. payrolls rose by 195,000 workers, exceeding the median estimate of analysts for a 165,000 gain. The Micex dropped 2 percent on June 20 after comments by Fed Chairman Ben S. Bernanke that the regulator may wind down its bond buying if the economy performs in line with projections.
“Investors are still concerned the Fed may curb the QE program earlier than expected, reducing credit liquidity,” Vladimir Savov, an equities strategist at Otkritie Capital in Moscow, said by phone. “Volatility will persist until there’s clarity about what’s going to happen to the easing program.”
Raspadskaya led gains on the Micex after saying it will resume work today at its flagship mine after a two-month halt.
Russia-dedicated funds received their first weekly inflow in six weeks, adding $69 million in the week ending July 3 compared with $285 million in outflows the week earlier, UralSib Capital analysts wrote in an e-mailed note, citing EPFR Global data.
The Micex climbed 1.2 percent yesterday to a five-week high after European Central Bank President Mario Draghi pledged yesterday to keep interest rates low. Europe is Russia’s biggest trade partner. Crude futures traded up 0.7 percent at $101.90, the highest since May 3, 2012.
Russia’s economy grew 1.6 percent in the first three months, the slowest pace since 2009. Bank Rossii held its refinancing rate at 8.25 percent on June 10 after inflation accelerated for a second month in May to the fastest pace in 21 months.
Russian equities have the cheapest valuations among 21 emerging markets tracked by Bloomberg. The Russian Volatility Index, which measures expected swings in RTS futures, decreased 0.5 percent, falling for the ninth day, the longest streak of declines since December 2011.
The Micex trades at 5 times its 12-month estimated earnings, having lost about 9 percent this year, compared with a multiple of 9.6 for the MSCI Emerging Markets Index, which is down 13 percent. The Bloomberg Russia-US Equity Index of the most-traded Russian companies in the U.S. lost 0.2 percent to 84.36 today.
The 14-day relative strength index on the Micex subsided to 53. The RSI measures how rapidly prices have advanced or dropped during a specified time period and readings below 30 indicate a security may be poised to rise.
Thirty stocks, or 60 percent, were trading above their 50-day moving average on the Micex yesterday, the highest since May 22. None closed yesterday at a 52-week low or at a one-year high, according to data compiled by Bloomberg.