Russia Stocks Gain Second Day as Oil Boosts Investor Appetite
Russia’s benchmark equity gauge climbed for a second day as crude traded near the highest level in more than four months and investors awaited this week’s U.S. Federal Reserve meeting.
The Micex Index (INDEXCF) added 1.2 percent to 1,315.79 by 10:46 a.m. in Moscow, after losing 3.3 percent last week. The 14-day relative strength index on the Micex climbed to 41.3 after falling to 31.4 last week, the closest since April to a level of 30, which signals a rebound to some analysts. VTB Group, Russia’s second-biggest lender, rose 1.8 percent to 4.84 kopeks.
Crude oil, Russia’s chief export earner, traded at $97.84 a barrel in New York today on renewed speculation that unrest in Syria will spread to other parts of the Middle East and disrupt supplies. The U.S. Federal Open Market Committee meets this week, and may provide clues on when policy makers will begin curtailing quantitative easing. Russia’s economy grew 1.6 percent in the first quarter, the slowest pace since 2009.
“There’s more optimism in the market today,” Slava Smolyaninov, deputy head of research at UralSib Capital, said by phone from Moscow. “Commodities are trading higher. Investors are waiting for the results of the Fed meeting and won’t be making any radical moves until then.”
On the Micex, 30 stocks increased while 20 dropped. The volume of shares traded on the gauge was 6.9 percent below the 30-day average, while 10-day price swings rose for a third day to 24.058.
Polymetal International Plc listed shares on the Moscow Exchange today, with trading expected to begin on June 20, according to a statement today from the exchange. The company, along with Evraz Plc will be excluded from FTSE 100 Index (RTSI$) effective June 24.
Bank Rossii held its refinancing rate at 8.25 percent on June 10. That matched the median estimate in a Bloomberg survey of 26 economists, with four predicting a quarter percentage point cut. Inflation in Russia accelerated for a second month in May to the fastest pace in 21 months.
OAO Novatek, the nation’s second-biggest natural-gas producer, jumped 3 percent to 324.47 rubles, rising for a second day. Reuters reported on June 13 that China Petroleum and Chemical Corp., known as Sinopec, may sign an agreement next week to join a $20 billion liquefied natural gas project run by Novatek in Yamal, citing unidentified people in Moscow.
The country’s equities have the cheapest valuations among 21 emerging markets tracked by Bloomberg. The Micex trades at 4.9 times its 12-month estimated earnings, having lost 11 percent this year, compared with a multiple of 9.8 for the MSCI Emerging Markets Index, which is down 9.5 percent.
The Russian Volatility Index tumbled 1.1 percent to 30.23. The Bloomberg Russia-US Equity Index of the most-traded Russian companies in the U.S. increased 0.9 percent to 85.51 on June 14.
To contact the reporter on this story: Ksenia Galouchko in Moscow at firstname.lastname@example.org
To contact the editor responsible for this story: Wojciech Moskwa at email@example.com