Russia’s dollar-denominated RTS Index jumped the most in 10 months as financial shares gained after the U.S. Federal Reserve said the world’s biggest economy will continue to need stimulus.
The RTS Index rallied 3.7 percent to 1,322.76, the most since Sept. 14. The benchmark ruble-denominated Micex Index added 2.6 percent, the most since April 24, to 1,368.11 by the close in Moscow. The volume of shares traded on the Micex was 20 percent above the 30-day average. Bank stocks advanced 4.2 percent on average, with OAO Sberbank, the country’s biggest lender, jumping 4.7 percent, the most since Jan. 8, and VTB Group rising 2.8 percent.
Financial stocks rallied as Fed Chairman Ben S. Bernanke backed sustained stimulus in a speech yesterday, after minutes of the Fed’s June meeting showed officials want to see more signs of job growth before starting to scale back the $85 billion-a-month bond purchases. 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.
“Bernanke’s comments reassured investors and added optimism to the previously weak trading,” Ivan Manaenko, the head of research at Veles Capital, said by phone from Moscow.
Sberbank advanced to 95.42 rubles, with its London stock adding 6 percent to $11.73. VTB, Russia’s second-biggest lender, increased to 4.699 kopeks in Moscow and 4.2 percent to $2.88 in London.
OAO Pharmstandard, Russia’s biggest drugmaker, tumbled 21 percent to 1,472.40 rubles, the most since October 2008. The shares have lost 34 percent since a July 8 shakeup in which the drugmaker said it offered $630 million for Bever Pharmaceutical Pte Ltd., without disclosing why, and announced the spin off of its own branded, non-prescription drugs business.
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. The stock retreated 20 percent to $11.15 in London today.
Forty four stocks rose on the Micex today, while six declined. Russian equities have the cheapest valuations among 21 emerging markets tracked by Bloomberg.
Brent oil dropped 0.7 percent to $107.75 a barrel in London, having risen 0.4 percent earlier, while crude decreased 1.6 percent to $104.77 in New York.
Global economic growth will be 3.1 percent this year, unchanged from 2012, 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 policy makers will leave the refinancing rate at 8.25 percent when they meet tomorrow, according to the median forecast of 22 economists surveyed by Bloomberg. The overnight auction-based repo rate will be held at 5.5 percent, a separate survey shows. Seven out of 20 economists predict a cut in that rate of 25 basis points.
The 14-day relative strength index on the Micex rose to 59 from 49 yesterday. 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.
Twenty three stocks, or 46 percent, were trading above their 50-day moving average on the Micex yesterday. 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, tumbled 3.1 percent. The Bloomberg Russia-US Equity Index of the most-traded Russian companies in the U.S. jumped 3.3 percent today.