Micex Advances to Month High on Ukraine De-Escalation Optimism

Russian stocks gained for a seventh day to the highest level in a month, led by OAO Gazprom and OAO Lukoil, after talks to de-escalate the conflict in Ukraine.

The Micex index climbed 0.5 percent to 1,425.18 at the close in Moscow. The gauge rose 5.2 percent last week, the steepest such advance since the period ended March 21. Twenty-one stocks climbed, while 29 retreated. Gazprom, Russia’s largest gas producer, added 1.2 percent, taking its four-day gain to 4.9 percent. Lukoil, the second-biggest oil company, jumped 1.6 percent, the biggest gainer on the Micex.

Ukrainian Foreign Minister Pavlo Klimkin met his Russian counterpart Sergei Lavrov in Berlin yesterday, seeking to ease tension. Klimkin said there’d been “moderate progress” and called on Russia to follow words with actions. The International Committee of the Red Cross demanded safety guarantees before it begins inspecting trucks from a convoy Russia says is carrying humanitarian aid at Ukraine’s border.

Stocks gained as “we didn’t see any new escalation of the conflict,” Vadim Bit-Avragim, who helps oversee about $4.1 billion at Kapital Asset Management LLC in Moscow, said by e-mail. “Generally, we have an improvement of the current geopolitical situation.”

Ukraine has warned the convoy may be a guise to bring military gear into the eastern regions. The government in Kiev said it would accept the convoy if the Red Cross distributes the aid after customs and border officers examine it.

The Micex has retreated 1.4 percent since the end of February, before Russia’s incursion into the Crimea peninsula. The measure trades at 5.1 times estimated earnings, compared with a multiple of 5.3 before the intervention and making it the cheapest market among developing nations.

Food Stocks

Food retailer OAO Magnit climbed 1.9 percent to the highest level since July 28, taking its seven-day gain to 11 percent.

“Magnit seems to be more resilient to the potential negative consequences of the redirection of import deliveries because of its high exposure to discounter format operations,” Natalia Kolupaeva, an analyst at ZAO Raiffeisenbank in Moscow, said by e-mail. Magnit has “operating efficiency stemming from vertical integration in its supply chain,” she said.

On Aug. 6, President Vladimir Putin ordered import restrictions on cheese, fish, beef, pork, fruit, vegetables and dairy products from the U.S. and the European Union in response to deeper sanctions.

The dollar-denominated RTS Index rose 0.9 percent to the highest level since July 25. Twenty-eight stocks on the Micex traded above their 50-day moving average on Aug. 15, the most this month and up from a four-month low of 10 on Aug. 7.

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