Russia Stocks Gain First Day in Three as Utilities Advance
Russian equities rose for the first time in three days as power stocks advanced, paring the benchmark stock gauge’s 12 percent slide from this year’s high.
The Micex Index (INDEXCF) added 0.5 percent to 1,387.87 by 10:27 a.m. in Moscow after a 1.5 percent retreat last week. Utilities increased the most of nine industry groups, rising 1.2 percent. EON Russia, a power producer controlled by Germany’s biggest utility, jumped 1.6 percent to 2.5867 rubles. OAO Russian Grids rose 1 percent to 1.358 rubles.
Crude slipped 0.6 percent to $93.58 a barrel in New York, declining for a fifth day. Markets in the UK and U.S. are closed today for public holidays. The volume of shares traded on the Micex was 22 percent below its 30-day average, while 10-day price swings climbed to 29.023, the highest since Sept. 26.
The Micex tumbled the most in a year on May 23, after manufacturing in China unexpectedly contracted and as concern the U.S. Federal Reserve will crimp stimulus measures curbed appetite for riskier assets. Russia left its main interest rates unchanged for an eighth month this month, brushing off government calls for lower borrowing costs.
Outgoing Bank Rossii Chairman Sergey Ignatiev has limited room for policy easing with inflation more than a percentage point above target, putting him at odds with an international push for monetary stimulus this month.
Russia-dedicated funds posted a third consecutive week of inflows in the period ended May 22, the longest stretch since the third quarter of 2012, Cameron Brandt, research director at EPFR Global, said on May 24.
Russia’s equities have the cheapest valuations among 21 emerging markets tracked by Bloomberg. The Micex trades at 5.2 times its 12-month estimated earnings and has lost 5.9 percent this year, compared with a 10.5 multiple for the MSCI Emerging Markets Index, which has dropped 2.6 percent in the period.
The dollar-denominated RTS Index (RTSI$) added 0.4 percent to 1,393.47. The RTS Volatility Index, which measures expected swings in stock futures, declined 2.2 percent to 23.97. The Bloomberg Russia-US Equity Index of the most-traded Russian companies in the U.S. retreated 0.7 percent to 92.01 on May 24.
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