Russian equities rose, paring last month’s drop, as expanding Chinese manufacturing boosted the outlook for earnings at metal and oil producers.
The Micex Index added 0.2 percent to 1,367.53 rubles by the close in Moscow after a 0.8 percent retreat last month. OAO Sberbank, Russia’s biggest lender, climbed 1.5 percent to 89.50 rubles, after slumping 4.1 percent last week. Oil producer OAO Lukoil advanced 1 percent to 1,944.50 rubles. OAO Mechel, the country’s largest producer of coal for steelmaking, gained 0.8 percent.
China’s economy is strengthening after a two-quarter slowdown, with a manufacturing gauge rising to a 16-month high in August, an official report showed yesterday. The Micex gauge fell 2 percent last week after Russia cut its 2013 economic-growth forecast for the second time this year. The country receives about half of its budget revenue from the oil and natural-gas industries.
“Russian commodity companies will benefit if Chinese growth recovers,” Oleg Popov, who manages $1 billion of securities for Allianz Investments, the asset-management arm of Europe’s biggest insurer, said by phone from Moscow. “This is especially positive news for metal companies.”
U.S. markets are closed for a holiday today. OAO Magnit, Russia’s biggest food retailer, gained 2 percent to 7,558.60 rubles.
Russia’s economy expanded 1.2 percent in the second quarter, the Federal Statistics Service reported on Aug. 9, missing the median forecast of 2 percent of economists surveyed by Bloomberg. The central bank refrained from cutting interest rates for an 11th month on Aug. 9, while highlighting “significant” risks to growth.
Crude oil futures dropped 0.8 percent to $106.84 a barrel in New York after President Barack Obama said he’ll seek authorization from the U.S. Congress before ordering military action against Syria.
OAO Moscow Exchange, Russia’s main equities and fixed-income bourse, transfered all equities, Russian depositary receipts and exchange-traded funds to T+2 trading mode effective today. The bourse’s stock slid 0.1 percent today, paring last week’s 6.8 percent advance.
Russian equities have the cheapest valuations among 21 emerging economies tracked by Bloomberg at 4.8 times 12-month estimated earnings, compared with a multiple of 10 for the MSCI Emerging Markets Index. The dollar-denominated RTS Index gained 0.1 percent to 1,291.98.
The volume of shares traded on the Micex was 35 percent below the 30-day average today, data compiled by Bloomberg show.
The Bloomberg Russia-US Equity Index of the most-traded Russian stocks in New York fell 0.2 percent on Aug. 30, while the Market Vectors Russia ETF, the largest dedicated Russian exchange-traded fund, was little changed at $25.81.