BLBG:Russia’s Micex Retreats 20% From April High on Global Economy, Oil Decline
Russian stocks fell more than 20 percent from this year’s high as oil prices slumped on rising concern the global equity rout will dampen raw material demand.
The Micex Index of 30 stocks sank 1.6 percent to 1,475.54 by 11:44 a.m. in Moscow, its lowest intraday level since October after paring an earlier loss of as much as 3 percent. That took the gauge’s six-day retreat to 14.5 percent and 20 percent down from this year’s high.
OAO Rosneft, Russia’s largest oil producer, lost 1.9 percent, while OAO Gazprom, the natural gas export monopoly, slid 3.9 percent. OAO Sberbank, the country’s biggest lender, tumbled 2.5 percent. The dollar-denominated RTS Index retreated 3.4 percent to 1,602.05, paring an earlier loss of as much as 5.3 percent. The index has slumped 19.3 percent in six days.
Crude for September delivery fell as much as $5.60, or 6.9 percent, to $75.71 a barrel in New York, the lowest intraday price since Sept. 29. The contract last traded 2.1 percent lower at $79.58. Federal Reserve policy makers will hold a one-day meeting today as the unprecedented downgrade of the U.S.’s top credit rating fuels speculation America is headed for a recession. Fed Chairman Ben S. Bernanke and his colleagues may prolong a pledge to maintain record monetary stimulus, said economists at JPMorgan Chase & Co., BNP Paribas and Goldman Sachs Group Inc.
“The current selloff is already overdone, and a bounce is totally in the cards unless there is an imminent systemic freeze of the funding markets,” VTB Capital analysts led by Alexey Zabotkin, said in an e-mailed report today.
VTB recommends oil exporters as “our preferred defensive play,” along with steel companies, because of the steep decline in their prices over the past six days. Steelmakers OAO Severstal and OAO Magnitogorsk Iron & Steel have both tumbled more than 20 percent over the past six days.
To contact the reporter on this story: Jason Corcoran in Moscow at jcorcoran13@bloomberg.net
To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net
