Russian stocks fell for the fourth day, erasing earlier gains as declines by commodity producers overshadowed advances by consumer-related and telecommunications shares.
The benchmark Micex Index slipped 0.1 percent to 1,362.91, extending the four-day slump to 2.5 percent. OAO GMK Norilsk Nickel, Russia’s biggest producer of the metal, fell 2.7 percent, OAO Mechel, a steel and coal producer, sank 1.7 percent and OAO Novatek, Russia’s second-biggest natural gas producer, slid 1 percent.
Brent crude, Russia’s main export earner, retreated 0.6 percent to $107.51 a barrel in London. Russia receives about half of its budget revenue from oil and natural gas sales. Copper dropped as much as 1.4 percent before trading little changed.
“Investors are switching to non-commodity stocks as oil and metal prices are weak,” Vitaly Kupeev, an analyst at Allianz Investments in Moscow, said by phone. “The situation in the metal sector is particularly poor.”
Norilsk Nickel dropped to the lowest level since December 2009 after JPMorgan Chase & Co. cut the stock to the equivalent of sell from neutral, citing a “mismatch” between expectations of rich cash returns and weakening commodity prices.
Oil, gas and basic resources stocks account for at least 55 percent of the Micex index, compared with about 17 percent for consumer services and telecommunications shares, according to data compiled by Bloomberg.
OAO Mobile TeleSystems, Russia’s biggest mobile-phone operator, increased 1 percent to 285.69 rubles. OAO Magnit, OAO Dixy Group and OAO M.video gained 0.3 percent each.
The Micex tumbled the most in a year on May 23, the day after U.S. Federal Reserve Chairman Ben S. Bernanke said the central bank could reduce the pace of its asset purchases if officials see signs of sustained improvement in growth. The Fed buys $85 billion of debt a month to support the economy by putting downward pressure on interest rates.
Fed Bank of Chicago President Charles Evans, who has been among the strongest proponents of record monetary accommodation, said yesterday he “would clearly not rule” out a decision to begin reducing bond purchases in September.
Russian equities have the cheapest valuations among 21 emerging economies tracked by Bloomberg at 5.2 times 12-month estimated earnings, compared with a multiple of 9.9 for the MSCI Emerging Markets Index.
The dollar-denominated RTS Index dropped 0.3 percent to 1,301.28, the third day of declines. The volume of shares traded on the Micex was 42 percent below the 30-day average, data compiled by Bloomberg show, while 10-day price swings rose to 15.425.