Russian stocks dropped the most in almost a week as Urals crude near a three-year high and worse- than-expected U.S. data stoked concern the global recovery will slow.
The 30-stock Micex (INDEXCF) slipped 1.2 percent to 1,574.10 at the close in Moscow, the biggest drop since Feb. 22. That pared its gain this month to 4 percent. VTB Group (VTBR), Russia’s second-biggest lender, sank 2.2 percent. OAO Lukoil (LKOH), the country’s second- largest oil company, dropped 1.8 percent. The dollar-denominated RTS Index (RTSI$) slid 1.2 percent to 1,708.16.
Orders for U.S. durable goods slumped slumped 4 percent in January, more than forecast, after a revised 3.2 percent gain the prior month, data from the Commerce Department showed today in Washington. Urals, Russia’s chief export, traded $2.39 off a three-year high reached on Feb. 24.
“A spike in oil prices will crimp economic growth, so while Russia rakes in additional export revenues, it also reduces the appeal of equities globally,” Julian Rimmer, a trader of Russian shares at CF Global Trading in London, wrote in e-mailed comments today. “As the high-beta play this ultimately is detrimental to the Russian investment case.”
The Micex has climbed 12 percent this year and trades at 6.2 times analysts’ earnings estimates for member companies. Brazil’s Bovespa index, which is valued at 10.7 times estimated earnings, has jumped 14 percent, according to data compiled by Bloomberg. The Shanghai Composite Index trades at 10.2 times estimated earnings, and the BSE India Sensitive Index has a ratio of 15.7.
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