Russian stocks fell for a second day as OAO Gazprom, the gas export monopoly, tumbled after president-elect Vladimir Putin said the tax burden on the nation’s natural gas producers is too low, while weak Chinese economic data curbed investor appetite for riskier assets.
The Micex Index (VTBMICX) of 30 shares fell 0.4 percent to 1,471.61 by the close in Moscow. Gazprom, which has the third-biggest weighting in the gauge, plunged 2.1 percent. Preferred shares of oil producer OAO Surgutneftegas retreated 2.5 percent while OAO Magnitogorsk Iron & Steel, Russian billionaire Victor Rashnikov’s steelmaker, sank 0.9 percent.
Gazprom sank to 170.90 rubles, its biggest one-day fall since April 6, after Putin told a government meeting today that gas taxes are “economically unjustified.” Emerging-market stocks dropped after foreign direct investment into China fell for a fifth month, outweighing a better-than-expected auction of Spanish debt.
“There has been talk of raising taxes for gas producers for years,” Michael Kart, managing partner at Spectrum Partners Ltd. in Moscow, said by phone. “The net effect on Gazprom’s profit and loss is unknown, but everyone is jittery and that has snowballed into a sell-off.”
Urals crude, Russia’s chief export blend, slid 0.4 percent to $114.25 a barrel. Foreign direct investment in China fell 6.1 percent in March from a year earlier, according to data from the Ministry of Commerce today. Industrial production in the U.S. was unexpectedly little changed in March for a second month, data from the Federal Reserve showed today in Washington.
“Clouds are thickening,” Chris Weafer, chief strategist at Troika Dialog, wrote in an e-mailed report today. “The metals and mining sector, globally and in Russia, has been among the weakest in recent weeks because of China fears. That weakness looks to have more to run before finding some stability.”
Spanish bonds gained as the nation sold 12-month and 18- month bills a day after borrowing costs climbed to the highest level this year.
The Market Vectors Russia ETF (RSX:US), a U.S.-traded fund that holds Russian shares, rose 0.3 percent to $29.74 today. The RTS Volatility Index, which measures expected swings in the index futures, slipped 0.8 percent to 31.87 points.
Today’s decline in the Micex trimmed this year’s advance to 4.9 percent. The benchmark gauge is valued at 5.5 times analysts’ earnings estimates for member companies, compared with a 13 times for Brazil’s Bovespa equity index, which has climbed 10 percent in 2012.
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