Russian shares fell, extending the worst start to the year since 2008, as oil retreated and the ruble approached a five-year low after a report showed the nation’s growth slowed more than estimated.
The Micex Index declined 0.6 percent to 1,454.45 by the close in Moscow, the lowest since Dec. 13, taking January’s slide to 3.3 percent. OAO Gazprom, the nation’s biggest company, tumbled 1.5 percent to 145.05 rubles, while oil producer OAO Surgutneftegas dropped 3.4 percent to 27 rubles. OAO M.video, Russia’s biggest electronics retailer, extended the worst performance on the Micex this month, losing 3.1 percent to 232.23 rubles.
Russia’s economy grew at less than half the previous year’s pace in 2013, falling short of economist forecasts. The Micex has retreated this month as a report showed Chinese manufacturing contracted and the Federal Reserve pushed ahead with stimulus cuts. The ruble slumped 6.9 percent against the dollar in January, the second-worst performing emerging-market currency. Brent crude, the nation’s chief export earner, dropped 0.6 percent, taking this month’s slide to 3.1 percent.
“The oil price isn’t adding to optimism,” Vadim Bit-Avragim, who helps oversee about 148 billion rubles ($4.2 billion) at Kapital Asset Management LLP in Moscow, said by e-mail. “There aren’t too many people willing to buy Russia at the moment since the ruble weakening has caused a panic. It doesn’t make sense to buy Russia considering the slow growth.”
The ruble slid 0.9 percent against a basket of dollars and euros to 40.8685, approaching an all-time low 40.9038 reached Jan. 29. A weaker ruble encourages Russians to withdraw and convert local-currency deposits, while hurting retailers by making imports more expensive.
Gross domestic product advanced 1.3 percent in 2013, the least since a 2009 recession, compared with 3.4 percent a year earlier, the Moscow-based Federal Statistics Service said. That missed the median 1.5 percent forecast of 19 economists in a Bloomberg survey and the Economy Ministry estimate of 1.4 percent.
Russia-dedicated stock funds posted $230 million of outflows in the seven days ended Jan. 29, the seventh consecutive week of redemptions, UralSib Capital LLC said, citing EPFR Global.
Grocer OAO Dixy Group fell 1.5 percent to 330.09 rubles, the lowest since November 2012, extending its slump this month to 19 percent. M.video has lost 22 percent this month, while OAO Magnit, the nation’s biggest retailer, has declined 8.9 percent.
Fed policy makers reduced the pace of bond buying for a second straight meeting on Jan. 29. The Micex Index advanced an average 77 percent during the Fed’s first two rounds of debt purchases, and fell 0.6 percent in periods of no stimulus, the biggest difference of 46 emerging and developed markets tracked by Bloomberg.
Chinese manufacturing contracted for the first time in six months in January, a private survey showed yesterday, adding to evidence that the world’s second-largest economy is slowing.
“The Russian stock market is highly sensitive to negative global news, such as China’s economic slowdown and the Fed tapering,” Alexander Kostyukov, an analyst at Veles Capital, said by phone from Moscow.
Steelmaker OAO Severstal retreated 2 percent to 282.70 rubles, the lowest since Nov. 15. Severstal declined 2.4 percent to $8.115 by 3:36 p.m. in London.
The dollar-denominated RTS Index slipped 1.5 percent to 1,301.02, the lowest since Sept. 4. Russian equities have the cheapest valuations among 21 developing-nation economies monitored by Bloomberg. Shares on the Micex trade at 3.2 times projected 12-month earnings, compared with a multiple of 9.1 for the MSCI Emerging Markets Index.