Bloomberg News

Russian Stocks Rise on Oil Gains, Chinese Manufacturing Boost

July 01, 2009

Russia’s Micex Index rose the most among world stock markets as a rising oil price boosted energy producers and Chinese manufacturing data supported commodity prices.

OAO Lukoil (LKOD), the country’s second-biggest crude producer, and OAO Gazprom, the world’s biggest natural-gas supplier, advanced more than 3 percent. OAO GMK Norilsk Nickel, Russia’s biggest mining company, added 4 percent. The 30-stock Micex Index (INDEXCF) rose 2.2 percent to 992.43 at 3:46 p.m. in Moscow, the biggest gain among about 90 equity benchmarks tracked by Bloomberg.

Oil rose above $70 a barrel before the release of a report forecast to show that U.S. crude inventories declined for a fourth week. China’s manufacturing expanded for a fourth month as a $585 billion stimulus plan and record bank lending revive the world’s third-largest economy.

“With oil showing signs of breaking through $70 a barrel, or at least stabilizing around that level, some investors are likely moving to add to their positions, especially after the recent correction gave them a much better entry point,” said Ron Smith, head of research at Alfa Bank in Moscow.

Russian stocks entered a bear market this month, under the most common definition, after the Micex fell more than 20 percent in three weeks from this year’s high on June 1. The index is still up 61 percent this year.

Lukoil rose 3.2 percent to 1,423 rubles on the Micex Stock Exchange, heading for its biggest advance in a week. Gazprom, Russia’s biggest publicly traded company, increased 4.3 percent to 162.74 rubles. Crude oil futures added 1.9 percent to $71.18 a barrel in New York.

Norilsk, Copper

Norilsk Nickel climbed as much as 4.2 percent to 2,941 rubles after losing 3.6 percent yesterday. Copper added 2.2 percent to $5,075 a metric ton on the London Metal Exchange as China’s Purchasing Managers’ Index rose from May to June. Nickel also advanced.

Russia’s manufacturing industry contracted last month at the slowest pace since September as stronger domestic demand offset falling export orders and companies cut jobs at a slower rate, VTB Capital said.

To contact the reporter on this story: William Mauldin in Moscow at wmauldin1@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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