Russian Stocks Fall Most in Week as Magnit Drops After 15% Rally

Russian equities dropped the most in more than a week as OAO Magnit, the nation’s biggest food retailer, led a retreat in consumer stocks.

The Micex Index decreased 0.8 percent to 1,525.36 by the close in Moscow, the most since Jan. 15. Of the 50 stocks in the gauge, 15 advanced, one was little changed and 38 sank. The amount of shares traded on the Micex was 68 percent above the 30-day average, data compiled by Bloomberg show. The RTS Index, Russia’s dollar-denominated equity gauge, lost 0.7 percent to 1,589.02.

Magnit fell 2.7 percent, the most in two months, as consumer services shares led declines on the Micex, falling 2 percent on average. Magnit was the biggest decliner on the Micex as investors sold the stock after a 15 percent, eight-day rally.

“The main idea behind the Magnit drop is that investors wanted to take profit,” Tatyana Bobrovskaya, a senior analyst at IFC Metropol in Moscow, said by phone. “Magnit posted very good earnings and investors had expected that.”

OAO Dixy Group, a Russian supermarket chain, retreated 1.8 percent to 443.17 rubles, the most since Jan. 10. O’Key Group SA, a Russian food retailer that focuses on large supermarkets, dropped 1 percent to $11.78 in London after cutting yesterday its sales-growth target, saying delays in opening stores last year will weigh on 2013 revenue.

Magnit Earnings

Magnit’s net income was 8.2 billion rubles ($271 million) versus 5.32 billion rubles in the year-earlier period, the Krasnodar-based retailer said in a statement today. That beat the average estimate of 6.63 billion rubles of seven analysts in a Bloomberg survey.

The retailer targets growth of as much as 29 percent this year, Chief Executive Officer Sergey Galitskiy said on a conference call today.

Nordgold NV, Russian billionaire Alexey Mordashov’s gold producer, fell 1.2 percent to $4.20 in London. Output in 2012 slid 5 percent, the company said today in a statement.

Crude oil reversed losses, climbing 0.2 percent to $95.73 in New York. Russia receives about half of its budget revenue from oil and natural gas. The Micex’s 10-day volatility rose to 12.346, according to data compiled by Bloomberg.

Nickel, lead and copper rose on the London Metal Exchange. The Russian Depositary Index retreated 0.9 percent to 1,790.41, led by depositary receipts of Magnit.

OAO Pharmstandard, Russia’s largest drugmaker, was the Micex’s biggest gainer, increasing 2.1 percent to 1,797.90 rubles.

The gauge trades at about 5.6 times estimated earnings and has added 3.4 percent this year. That compares with a multiple of 11 times for the MSCI Emerging Markets Index, which has gained 2.2 percent this year.

Russian equities have the lowest valuations based on estimated earnings among 21 emerging markets tracked by Bloomberg.