Bloomberg News

Russia Stocks Retreat to November Low as China Data Crimps Crude

April 15, 2013

Russian shares slid to the lowest level since November as crude oil dropped after economic growth unexpectedly slowed in China, curbing demand for stocks in the world’s biggest energy exporter.

The Micex Index (INDEXCF) sank 0.6 percent to 1,377.97 by 10:50 a.m. in Moscow, the lowest intraday level since Nov. 26 and a 12 percent retreat from this year’s high reached on Jan. 28. The gauge fell 2.2 percent last week. Trading volumes were 18 percent above the 30-day average, while 10-day price swings retreated to 13.035.

Crude, Russia’s biggest export earner, traded at a one- month low, losing 2.4 percent to $89.09 per barrel in New York. In China, the world’s second-largest crude consumer, gross domestic product rose 7.7 percent in the first quarter, the National Bureau of Statistics said in Beijing. That compared with an 8 percent median forecast by analysts in a Bloomberg News survey and 7.9 percent in the fourth quarter.

OAO Mechel, Russia’s biggest coking coal producer, fell 2.7 percent to 127.50 rubles, the lowest intraday level since March 2009. The company today reported a fourth-quarter net loss of $1.11 billion, compared with a $54.9 million profit in the third quarter, according to a statement today. Mechel’s 2012 net loss was $1.66 billion compared with profit of $728 million in 2011.

Utilities stocks led declines among nine industry groups on the Micex, losing 3.6 percent on average. OAO Inter RAO UES, Russia’s third-largest power producer, tumbled 6.7 percent to 1.22 kopeks, the biggest decliner on the benchmark measure. Federal Grid Co. retreated 5.7 percent to 10.99 kopeks.

Volatility Jumps

The relative strength index on the Micex was at 27. A value below 30 signals the index has been oversold and may reverse losses. The Standard & Poor’s GSCI Index of commodities retreated 1.3 percent to 614.78.

The RTS Volatility Index, which measures expected swings in stock futures, jumped 6.4 percent to 22.67, the sixth day of gains. The Market Vectors Russia ETF, the largest dedicated Russian exchange-traded fund, lost 0.7 percent to $27.11 on April 12. The Bloomberg Russia-US Equity Index (RUS14BN) decreased 1.1 percent to 94.32 in New York on April 12.

Russian equities have the cheapest valuations among 21 emerging markets tracked by Bloomberg. The Micex trades at 5.1 times estimated earnings and has lost 6 percent this year, compared with 10.3 times for the MSCI Emerging Markets Index (MXEF), which has slid 3.5 percent this year.

To contact the reporter on this story: Ksenia Galouchko in Moscow at kgalouchko1@bloomberg.net

To contact the editor responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net


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