Russian equities fell for a second day as investors await minutes from the U.S. Federal Reserve’s last meeting amid concern the regulator will curb stimulus.
The benchmark Micex Index dropped 0.9 percent to 1,333.71 by the close in Moscow. The dollar-denominated RTS Index lost 0.6 percent to 1,275.29. The volume of shares traded on the Micex was 34 percent below the 30-day average. OAO Pharmstandard, Russia’s biggest drugmaker, tumbled 8.8 percent to 1,863.40 rubles.
Fed Chairman Ben S. Bernanke speaks today and the Federal Open Market Committee publishes minutes from its June meeting. The Micex slid 2 percent on June 20 after comments by Bernanke that the central bank may wind down its bond buying if the economy performs in line with projections.
“If the Federal Reserve begins cutting its stimulus program, this will lead to a drop in commodities and this is bad for Russia,” Andrey Vashevnik, who manages $25 million as chief investment officer at R&B Investment Fund Ltd., said by phone in Moscow.
A report from the General Administration of Customs in Beijing showed that China’s exports fell 3.1 percent in June from a year earlier. The decline in June exports compared with a 1 percent increase in the previous month and last year’s average monthly growth of 8.3 percent.
Pharmstandard declined 8.5 percent yesterday, the most since May 2009, and tumbled 18 percent to $16.50 in London. The company will offer to buy out shareholders who vote against a planned spinoff of its over-the-counter unit for 2,180 rubles a share, equivalent to $16.50 per GDR. The GDRs were trading at a 20 percent premium before the plan was announced.
Forty stocks fell on the benchmark today, while 10 advanced. Russian equities have the cheapest valuations among 21 emerging markets tracked by Bloomberg.
Global growth will be 3.1 percent this year, unchanged from the 2012 rate, and less than the 3.3 percent forecast in April, the International Monetary Fund said yesterday, trimming its prediction for this year a fifth consecutive time. The Micex gauge climbed to a five-week high on July 4 as European Central Bank President Mario Draghi pledged to keep interest rates low. Europe is Russia’s biggest trade partner.
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 last month. The overnight repo rate will be held at 5.5 percent when the central bank next meets on July 12, according to the median estimate of 20 economists surveyed by Bloomberg. Seven predict a cut of 25 basis points.
The 14-day relative strength index on the Micex fell to 49. 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 and above 70 to fall.
Brent oil gained 0.5 percent to $108.33 a barrel in London, while Standard & Poor’s GSCI Index of commodities advanced 0.9 percent, rising for the seventh day. Urals crude added 0.2 percent to $108.22.
Twenty five stocks, or 50 percent, were trading above their 50-day moving average on the Micex on July 9. None closed yesterday at a 52-week low and one at a one-year high, according to data compiled by Bloomberg.
The Russian Volatility Index, which measures expected swings in RTS futures, advanced 2.9 percent today. The Bloomberg Russia-US Equity Index of the most-traded Russian companies in the U.S. added 0.2 percent to 85.98 today.
The Micex trades at 5.1 times its 12-month estimated earnings, compared with a multiple of 10.2 for the MSCI Emerging Markets Index.