Russian equities fell for the first time in four days as consumer stocks retreated on concern the nation’s economic slowdown will curb earnings.
The Micex Index dropped 0.4 percent in Moscow to 1,498.73 by the close. OAO Aeroflot, the country’s biggest airline, lost 3.3 percent to 78.81 rubles. OAO Magnit, Russia’s largest retailer, sank 1.7 percent to 8,247 rubles, the lowest since Oct. 3. OAO Dixy Group slid 5.2 percent to 358 rubles, the strongest percentage decline on the gauge.
Consumer-services shares led losses on the Micex with a 1.9 percent slump on average. Russia’s economy grew 1.2 percent in the third quarter, trailing estimates, as a lack of investment kept the world’s largest energy exporter from reversing its worst slowdown since a 2009 recession. The country risks a period of entrenched economic stagnation, the Vedomosti newspaper said yesterday, citing an Economy Ministry report.
“The consumer theme was extremely popular among investors over the past few years, it has drained its potential for growth,” Aleksei Belkin, who helps manage about $4.5 billion in assets as chief investment officer at Kapital Asset Management LLC in Moscow, said by phone. “The big question right now is whether the economic stagnation will affect the consumer.”
Magnit dropped the most since October 2011 on Jan. 10 after the company said retail sales growth slowed to 23 percent in December. The grocer is scheduled to report 2013 results on Jan. 27. The stock tumbled 2.9 percent to $54.25 in London.
Deutsche Bank AG analysts cut Magnit to hold, citing a weaker ruble and lower real disposable income. The ruble snapped seven days of losses against the dollar today, adding 0.1 percent by 6 p.m. in Moscow, when the central bank stops its market operations.
Aeroflot’s shares rallied 41 percent since November through Jan. 20 on speculation the company will benefit from Russia’s Winter Olympics and as it plans to sell as much as 10 percent of its stock this year.
AFK Sistema fell as much as 6.6 percent to 41.75 rubles, before paring declines to close at 43.50 rubles, after the Interfax news service said the holding is ready to invest 1 billion euros ($1.36 billion) in paper producer Investlesprom. That figure “isn’t correct,” Chairman Mikhail Shamolin said in a Bloomberg interview in Davos, Switzerland today. The stock dropped 1.2 percent to $29.65 in London.
United Co. Rusal, the world’s largest aluminum producer, added 6.6 percent to 122.89 rubles, the biggest advancer on the Micex. Aluminum premiums are seen at record highs in the U.S. and Asia, researcher Harbor Intelligence said in a report dated Jan. 20. The outlook for the industry was raised to positive from neutral, according to a Jan. 16 note by Sanford C. Bernstein & Co. analysts.
The dollar-denominated RTS Index fell 0.3 percent to 1,391.75, taking this year’s decline to 3.5 percent.
Russian equities have the cheapest valuations among 21 developing-nation economies monitored by Bloomberg, with shares on the benchmark Micex trading at 3 times projected 12-month earnings, compared with a multiple of 9.2 for the MSCI Emerging Markets Index.