Russian stocks dropped the most in almost two weeks as OAO Inter RAO UES tumbled in its last day of trading on MSCI Inc.’s global standard indexes.
The Micex Index sank 1.2 percent, the most since Nov. 13, to 1,484.37 by the close in Moscow. Inter RAO, the worst performer in the benchmark this year, slid for a third day, losing 6.1 percent to 0.71 kopeks. The stock was the biggest decliner on the Micex in percentage terms today. OAO Gazprom, Russia’s biggest company, lost 3.4 percent to 142.88 rubles, while OAO Sberbank retreated 1.8 percent to 103.35 rubles.
MSCI removed state-run power company Inter RAO along with property developer LSR Group and pipes maker OAO TMK from its Russia gauge as part of its index rebalancing, effective from the close. The weighting of Gazprom, which had the biggest decrease on the MSCI Emerging Market Index today, was reduced to 23.65 percent, while Sberbank’s was cut to 14.43 percent.
“Gazprom, Sberbank, Inter RAO are falling on MSCI rebalancing changes,” Vadim Bit-Avragim, who helps manage about $4.4 billion at Kapital Asset Management LLC in Moscow, said by phone. “We aren’t alone in our declines today; investors don’t want to buy risk.”
The developing-nation gauge dropped 0.6 percent as of 4:13 p.m. in London, while brent crude, the benchmark grade for half the world’s oil, was little changed. Confidence among U.S. consumers unexpectedly declined in November to a seven-month low, with the Conference Board’s index falling to 70.4 from a revised 72.4 a month earlier.
The RTS Index retreated 1.2 percent to 1,416.43. Russia’s equities have the cheapest valuations among 21 emerging economies monitored by Bloomberg, with shares on the benchmark trading at 4.3 times projected 12-month earnings, compared with a multiple of 10.5 for the MSCI Emerging Markets Index.
PIK Group was among 17 advancers on the 50-member Micex after the Kommersant newspaper reported that the ex-owner of Rosbuilding, Sergey Gordeev, is in advanced talks with billionaire Suleiman Kerimov to buy a 47 percent stake in the developer. The shares added 1.6 percent to 64.08 rubles.
Goldman Sachs Group Inc. upgraded Russian equities to overweight today, citing valuations. Gazprom’s global depositary receipts sank 2.4 percent to $8.69 in London, while Sberbank declined 0.8 percent to $12.60.