Russian stocks declined for the sixth day, the longest losing streak since October 2008, as oil approached a bear market and failure of European governments to agree on a loan for Greece curbed demand for riskier assets.
The 30-stock Micex Index (INDEXCF) fell 1.2 percent to 1,626.14 by the 6:45 p.m. close in Moscow after a 1.5 percent drop on June 17. OAO Novatek, Russia’s second-largest natural-gas producer, sank 4.6 percent and OAO Novolipetsk Steel, the steelmaker owned by billionaire Vladimir Lisin, slid 2.2 percent. OAO Transneft, the country’s oil pipeline operator, fell 2.1 percent.
Oil, Russia’s main export-revenue earner, slid for a second day, trading at the lowest level in four months as officials failed to agree on releasing a loan payout to Greece, stoking concern a possible default would slow the global recovery. Japan’s exports dropped in May more than forecast and reports this week may show U.S. home sales shrank last month to the lowest this year, according to a Bloomberg survey of economists.
“Russia is the high beta play on growth, so while that growth is being questioned, Russia invariably underperforms,” Julian Rimmer, a trader of Russian shares at CF Global Trading in London, said by e-mail today.
Oil traded as low as $91.14 a barrel today, the weakest since Feb. 22. Crude dropped 0.6 percent at 11:15 p.m. in New York and is down 19 percent from this year’s peak on April 29, approaching the 20 percent threshold for a bear market. The ruble depreciated 0.3 percent to 28.1424 per dollar.
“There are three factors at work here: the declining price of crude, the short-term concerns about the potential systemic risk posed by a Greek default and the wider, more general risk aversion predicated on slowing U.S. growth and the possibility of a hard landing for China,” Rimmer said.
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