Russia Stocks Rise to 2-Week High as China Boosts Oil Producers

Russian stocks rose to a two-week high as commodity producers in the world’s biggest energy exporter advanced on bets Chinese growth will support demand.

The Micex Index (INDEXCF) increased 0.5 percent to 1,491.36 by 4:24 p.m. in Moscow, the highest intraday level since Jan. 29. Crude producers OAO Tatneft and OAO Surgutneftegas rose at least 1.1 percent. OAO Novatek, the nation’s second-biggest natural-gas producer, added 1.1 percent to 413.97 rubles.

China’s export and import growth unexpectedly accelerated in January. Standard & Poor’s GSCI Index (SPGSCI) of commodities rose 0.4 percent. Federal Reserve Chairman Janet Yellen said yesterday the economy is picking up and reiterated the outlook for “measured steps” in stimulus cuts.

“Today you had very good data on Chinese trade helping commodities,” Renata Klita, an analyst at Blackfriars Asset Management Ltd., said by e-mail. “Yesterday’s comments from the Fed that they would be careful with tapering sparked all emerging markets.”

Oil, Russia’s chief export earner, gained 0.3 percent to $109 a barrel in London. Russia receives about half of its budget revenue from oil and natural gas sales.

While the Fed pressed ahead with stimulus cuts in January, policy makers have also sought to reassure investors they intend to hold the Fed’s target rate near a record low. The Micex Index advanced an average 77 percent during the Fed’s first two rounds of debt purchases, and fell 0.6 percent in periods of no stimulus, the biggest difference of 46 emerging and developed markets tracked by Bloomberg.

Risk Appetite

“There’s appetite for risk, the main stress factors seem to have been relieved,” Kirill Chuyko, BCS Financial Group’s head of equity research, said by phone from Moscow.

MSCI Inc.’s Emerging Markets Index rose 0.9 percent to 952.82 today. MSCI is scheduled to announce its quarterly index rebalancing results after the market close today.

The dollar-denominated RTS Index (RTSI$) gained 0.7 percent to 1,351.11. Russian equities have the cheapest valuations among 21 developing-nation economies monitored by Bloomberg. Shares on the Micex trade at 3.2 times projected 12-month earnings, compared with a multiple of 9.3 for the MSCI Emerging Markets Index.

(bloomberg.com Feb 12, 2014)