Oct. 5 (Bloomberg) -- Russia’s stocks rose, trimming losses from the steepest three-day decline in more than a year, after Federal Reserve Chairman Ben S. Bernanke said he’s ready to employ fresh measures to support the U.S. economy.
The Micex Index of 30 shares rose 0.5 percent to 1,274.64 by 11:59 a.m., paring an earlier advance of as much as 2.8 percent and heading for the first advance in four sessions. The dollar-measured RTS Index added 0.2 percent to 1,227.88.
The Fed is ready to take additional steps to boost growth, Bernanke said in Washington yesterday, cautioning lawmakers against budget moves that may harm a “sluggish” recovery. The Standard & Poor’s 500 Index rebounded after the comments and after the Financial Times quoted Olli Rehn, European Union commissioner for economic affairs, as saying there’s an “increasingly shared view” that the region needs a coordinated approach to halt the debt crisis.
“The overnight gain in the price of oil has helped Moscow’s markets to open with a partial reversal of yesterday’s big loss,” Chris Weafer, chief strategist at Troika Dialog in Moscow, wrote in an e-mailed note today. “Investors will, however, again wait to see how Europe’s bourses and, later, the U.S. markets react to the Italian downgrade and further cautious statements about European solvency risk.”
Oil, Russia’s biggest export, gained for the first day in four in New York after a surprise drop in U.S. crude stockpiles led investors to reduce bets that prices will decline. Crude for November delivery rose as much as $2.79 to $78.46.
Hedge funds cut their bullish bets, or long positions, on oil by the most in almost two months in the week ended Sept. 27, according to the Commodity Futures Trading Commission. Concern that economic growth will falter sent crude to the biggest quarterly drop since 2008 in the three months ended Sept. 30.
OAO Lukoil, Rosneft’s second-biggest oil producer, added 1.9 percent to 1,572.8 rubles. OAO Tatneft, the oil producer based in the Tatarstan region, rallied 0.5 percent to 128.59 rubles.
The Micex declined 10 percent in the previous three sessions, the most in that length of time since July 2010, Bloomberg data show.
Russian stocks are the cheapest in the BRIC group of emerging economies, based on yesterday’s closing prices, with Micex Index members trading at 4.5 times analysts’ estimated earnings, compared with 8.7 for Brazil’s Bovespa, 10.9 for China’s Shanghai Composite Index and 13.4 for the BSE India Sensitive Index.
“U.S. stocks rebounded some and for the most part, global markets, RTS futures, followed,” Ilya Kravets, a research analyst ED Capital in New York, said by phone. “Russian stocks are ridiculously cheap, so you’re seeing some buying but mostly people are capitulating, they’re selling more liquid stocks like Sberbank because it’s easier for them to get out.”
--With reporting by Leon Lazaroff in New York. Editors: Chris Peterson
--Editor: Chris Peterson
--Editors: Chris Peterson, Peter Branton
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