BLBG:Micex Fell as Oil $109 Crude, Europe Debt Curbs Risk Appetite
Russian stocks fell as the European debt crisis outweighed oil trading near its highest in nine months and after Moody’s Investors Service said Greek default risk remains high.
The 30-stock Micex Index (INDEXCF) declined to 1,589.63 as of 1:30 p.m. in Moscow. Potash producer OAO Uralkali slid 0.6 percent. The dollar-denominated RTS Index advanced 0.1 percent to 1,724.02.
Stocks extended losses after Moody’s Investors Service said Greek default risk remains high. The world economy is “not out of the danger zone” amid fragile financial systems, high public and private debt and rising oil prices, IMF Managing Director Christine Lagarde said this weekend. Oil has advanced 11 percent this year amid concern sanctions against Iran’s nuclear program will disrupt crude supplies from the second-biggest producer in the Organization of Petroleum-Exporting Countries.
“While current oil prices are providing support for Russian markets, they soon will be considered a global economic problem,” Chris Weafer, chief strategist at Troika Dialog, wrote in an e-mailed report today. “Thus, the time that the oil price will actually support markets will be fairly limited, so Russia should make the most of it for the time being.”
Oil, Russia’s main export revenue earner, fell 1 percent to $108.63 a barrel in New York. The contract gained 1.8 percent to $109.77 on Feb. 24, the highest close since May 3. Prices increased 6.3 percent last week.
German lawmakers vote on a second Greek rescue package today. Europe’s biggest economy is also weighing whether to beef up the region’s financial backstop to 750 billion euros ($1 trillion) at a March 1-2 European summit.
The Micex is up 14 percent this year and trades at 6.2 times analysts’ earnings estimates for member companies.
The gauge retreated 17 percent in 2011, compared with an 18 percent drop for Brazil’s Bovespa index, which is valued at 10.5 times estimated earnings according to data compiled by Bloomberg. The Shanghai Composite Index trades at 9.6 times estimated earnings, and the BSE India Sensitive Index has a ratio of 15.7.
To contact the reporter on this story: Jason Corcoran in Moscow at jcorcoran13@bloomberg.net
To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net
