Russian stocks snapped two days of gains as climbing oil prices failed to offset concern the U.S. economic recovery will flag.
The 50-stock Micex Index (INDEXCF) dropped 0.6 percent to 1,507.16 by the close in Moscow. The volume of shares traded was 33 percent below the 100-day average, data compiled by Bloomberg show. VSMPO-Avisma, the world’s biggest titanium maker, sank 3 percent. OAO Novorossiysk Commercial Sea Port dropped 2.5 percent.
More Americans than forecast filed applications for unemployment benefits last week, data today showed. The U.S. Treasury will exhaust what it called “extraordinary” measures to keep funding the government by February or March after the nation hit its $16.4 trillion debt ceiling Dec. 31. Crude, Russia’s biggest export, added 1.4 percent in New York after China’s exports increased more than forecast in December.
Investors are “loathe to venture into Russian equities without knowing the extent of the chill factor blowing from the West,” Chris Weafer chief strategist at Sberbank Investment Research, wrote by e-mail today. “The China news is positive, but investors are much more focused on the U.S. and the potential for negative global growth impact if the law-makers in Washington don’t resolve several big debt and budget issues this quarter.”
OAO Magnit, a retailer, gained 0.9 percent after net retail sales gained 35 percent from a year earlier in December.
The U.S. budget deal struck by President Barack Obama and lawmakers last week will reduce gross domestic product by 0.9 percentage point this year, according to the median estimate of 31 economists in a Bloomberg survey. More than three quarters of economists surveyed expect that a deal to raise the debt ceiling will be passed by Congress before special measures put in place by the Treasury Department on Dec. 31 expire.
The Micex trades at about 5.6 times estimated earnings. That compares with a multiple of 10.9 times for the MSCI Emerging Markets Index.
Russian equities have the lowest valuations based on estimated earnings among 21 emerging markets tracked by Bloomberg. Russia receives about half of its budget revenue from oil and natural gas industry sales.
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