Russian stocks snapped a two-day retreat as steelmakers rallied after a Chinese manufacturing index unexpectedly expanded.
The Micex Index climbed 1.5 percent to 1,396.65 rubles at the close in Moscow. Steelmaker OAO Severstal gained 2.8 percent. OAO Novolipetsk Steel rose 3.2 percent to 52.57 rubles, while its London-traded stock advanced 3.5 percent to $15.96. The volume of shares traded on the Micex was 13 percent below the 30-day average, data compiled by Bloomberg show.
Metal companies gained as prices climbed after the Chinese economy showed signs of stabilization. The preliminary reading of 50.1 for a Purchasing Managers’ Index released today by HSBC Holdings Plc and Markit Economics topped a 48.2 median estimate in a Bloomberg News survey of economists. A number above 50 indicates an expansion.
“Any pick-up in domestic or international demand, especially in China, is likely to set a positive market sentiment,” Aleksei Belkin, a chief investment officer at Kapital Asset Management LLC in Moscow, said by phone. Any improvement in the Chinese economy is “positive for Russia in terms of commodity demand,” he said.
Companies on the Micex trade at 5.3 times average 12-month estimated earnings, compared with a multiple of 9.8 for the MSCI Emerging Markets Index.
The Micex erased a decline of as much as 0.6 percent at the start of trading today. U.S. Federal Reserve officials were “comfortable” with Chairman Ben S. Bernanke’s plans to start reducing bond buying this year should the U.S. economy improve, July meeting minutes showed.
“Markets yesterday received clarity of the ‘‘wrong kind’’’ from the Fed, BCS Financial Group said in a note to investors today.
The Bloomberg Russia-US Equity gauge gained 1.2 percent to 92.20 at 11:39 a.m. in New York. The Market Vectors Russia ETF, the largest exchange-traded fund dedicated to Russian equities, increased 1.7 percent to $26.54. The RTS volatility index, which measures expected swings in the stock futures, retreated 5.4 percent.