Micex Rallies for Eighth Day on Optimism Ukraine Tension EasingPriyanka Sharma
Russian stocks rose for an eighth day, extending the longest winning streak in 11 months, as energy companies advanced and optimism grew that the conflict in Ukraine may de-escalate.
The Micex Index climbed 0.9 percent to 1,437.60 at the close in Moscow, boosting the gain since Aug. 7 to 7.8 percent. OAO Gazprom, Russia’s dominant natural-gas exporter, climbed 1.4 percent to the highest level since July 24. OAO TMK jumped the most in more than two months after OAO Rusnano said it will buy a stake in the the world’s largest pipe producer by output.
The Red Cross said it’s working on the details of a safe-passage plan for a Russian convoy intended to ship humanitarian aid to rebel-held areas of eastern Ukraine. President Vladimir Putin will take part in a meeting with his Ukrainian counterpart Petro Poroshenko, Customs Union leaders and European officials in Belarus on Aug. 26, the Kremlin said in a statement.
“Markets are thinking that geopolitical risks have reduced,” Liza Ermolenko, a London-based emerging-market economist at Capital Economics Ltd., said by phone. “You can see this trend across emerging markets. Investors feel more relaxed.”
The conflict has killed more than 2,000 people and fractured the country since Russia annexed Crimea in March. The war, which Ukraine and its allies say is being fueled by Putin’s support for the insurgents, has led to sanctions that have hurt trade and threatened to send Russia’s $2 trillion economy into a recession.
The stock rally has trimmed Micex’s losses to 0.5 percent since the incursion into Ukraine. The measure trades at 5.1 times projected 12-month earnings, compared with a multiple of about 11 for the MSCI Emerging Markets Index.
OAO Lukoil, Russia’s second-biggest natural gas producer, advanced to the highest level since July 11, adding 1 percent, and OAO Sberbank, the biggest lender, gained 1.1 percent.
TMK climbed 4.1 percent to the highest since July 16 after Rusnano, a state-run nanotechnology venture capital company, said it will buy 6 percent of the company. OAO Norilsk Nickel rose 3.3 percent, the most since May 7.
The Micex Index closed above the 200-day moving average, a technical analysis indicator that signals a strengthening trend to some traders. The dollar-denominated RTS Index climbed 0.7 percent to 1,251.69, the highest level since July 24.