Russian stocks rose to the highest level since February as signs U.S. lawmakers will reach a deal to avoid possible default boosted appetite for riskier assets.
The Micex Index increased 1.4 percent to 1,531.67 by the close in Moscow, the highest since Feb. 13. The dollar-denominated RTS gained 1.5 percent to 1,495.31. OAO Magnit, the nation’s largest food retailer, closed up 1.1 percent at 8,450 rubles. OAO Gazprom, the natural gas export monopoly, rallied 2.3 percent to 156.25 rubles. OAO Sberbank, the country’s biggest lender, added 1.7 percent to 104.70 rubles.
Democrat and Republican Senate leaders made reference to progress in talks on a deal to suspend the debt ceiling through Feb. 7 and fund the government through Jan. 15. The U.S. will not default, former Treasury Secretary Lawrence Summers said in Seoul today. Crude, Russia’s main export earner, slid 0.4 percent to $102 in New York.
“The market has received good news that there’s been progress in U.S. government talks,” Alexander Kostyukov, an analyst at Veles Capital, said by phone from Moscow. “A U.S. default would be devastating for investors’ appetite for riskier markets, like Russia.”
Russian equities have the cheapest valuations among 21 emerging economies monitored by Bloomberg, with shares on the index trading at 4.5 times projected 12-month earnings, compared with a multiple of 10.7 for the MSCI Emerging Markets Index. Ten-day price swings on the Micex sank to 12.364 from 14.397 yesterday.
OAO TMK, Russia’s largest producer of steel pipes for the oil and gas industry, jumped 1 percent to 84.98 rubles. Its global depositary receipts were admitted to trading on the Moscow Exchange, according to a regulatory filing today. TMK’s GDRs advanced 0.4 percent to $13.15 in London.
The Bloomberg Russia-US gauge added 0.4 percent to 102.36 yesterday. The Market Vectors Russia ETF, the biggest U.S. exchange-traded fund that holds Russian shares, lost 0.1 percent to $29.55.