Russian Stock Gains Erase Earlier Loss, Led by Energy Producers

Russian stocks rose, reversing earlier losses, as energy and commodity producers climbed on optimism China’s economy is stabilizing.

The benchmark Micex Index advanced 0.4 percent to 1,388.36 by the 6:45 p.m. close in Moscow, after declining as much as 0.3 percent. Billionaire Vladimir Lisin’s OAO Novolipetsk Steel added 1.4 percent to the highest level since March, while oil and gas shares on average increased 0.5 percent. Power producer OAO Rushydro jumped 3.8 percent.

Emerging-market stocks rallied for a third day as money supply in China unexpectedly accelerated and new yuan loans exceeded estimates in July, according to official reports after the market closed Aug. 9. Data last week showed China’s industrial output and exports rose more than analysts estimated.

The data confirmed the upward trend in the Chinese economy and increasing demand for raw materials, metallurgy and steel, UFS Investment Co. said in a research note today.

Russia’s gross domestic product expanded 1.2 percent in the second quarter, below the most pessimistic forecast in a Bloomberg survey of 19 economists and less than 1.6 percent recorded in the first three months, according to Federal Statistics Service data released on Aug. 9.

Bank Rossii kept its main lending rates unchanged on Aug. 9 as inflation remained above policy makers’ target range of 5 percent to 6 percent. The central bank sees “significant” risks to growth, it said in a statement accompanying the decision.

Biggest Weightings

OAO Gazprom, the country’s largest company, increased 0.7 percent to 129.03 rubles, and OAO Lukoil, the nation’s biggest non-state controlled crude producer, lost 0.2 percent to 1,919.90 rubles. Gazprom and Lukoil have the biggest weightings in the Micex Index at about 16 percent and 14 percent, respectively.

Novolipetsk Steel advanced for a fourth day after saying earnings before interest, taxes, depreciation and amortization rose 26 percent in the second quarter from the previous three months. Coal and steel producer OAO Mechel increased for a third day, adding 2.9 percent to 102 rubles.

OAO Uralkali, the potash producer part owned by billionaire Suleiman Kerimov, fell 2.3 percent to 161.41 rubles, taking this year’s decline to 31 percent. Uralkali said on July 30 it would halt a venture with a Belarusian potash miner that controlled exports from the former Soviet Union, ending production restrictions that underpinned global prices and triggering a selloff in fertilizer producers’ shares.

“Fundamentally the stock is weak at the moment and can only start rising if it falls much further to begin with or if people start seeing the first supply contracts,” Yulia Bushueva, a money manager at Arbat Capital in Moscow, said by e-mail.

Before it's here, it's on the Bloomberg Terminal.