Russia Stock Market Falls For 2nd Week

Russian stocks sank for a second week, erasing the benchmark index’s gain this year, as concern the global economic recovery is faltering pushed crude below $100 for the first time since February.

The 30-stock Micex Index (INDEXCF) retreated 0.3 percent to 1,387.60 headed for a 5.8 percent drop this week. OAO Raspadskaya, a Russian coal producer, lost 2.4 percent while United Co. Rusal dropped 1.8 percent. OAO Novatek, the country’s second-biggest natural-gas company, rose 0.4 percent and OAO GMK Norilsk Nickel added 0.5 percent. OAO Surgutneftegas, Russia’s fourth-largest oil producer, fell 1.3 percent.

Oil, Russia’s main export earner, dropped the most since December yesterday as a U.S. government report showed payrolls had their smallest gain in six months. France and Greece hold elections this weekend, stoking concern leadership changes will hamper efforts to resolve Europe’s debt crisis.

“The Russian market is like a monkey that’s watching the Western economic indicators,” Alexander Ivanischev, equities analyst at Infina Investment Co. in Moscow, said by phone. “External risks from the European power change and the mixed U.S. data are pressuring the Micex.”

Russia, the world’s biggest energy exporter and the largest producer of nickel and palladium, got almost 50 percent of budget revenue from oil and gas sales last year according to government estimates.

Russia-focused equity funds recorded back-to-back outflows in the week ended May 2 for the first time since December, posting net outflow of $18 million, according to EPFR Global data.

The dollar-denominated RTS Index fell 0.4 percent to 1,492.54. Markets are open today to replace the May 9 public holiday.

Crude oil for June delivery tumbled $4.05 to $98.49 a barrel on the New York Mercantile Exchange yesterday, the lowest settlement since Feb. 7. It was the biggest one-day drop since Dec. 14 and capped a 6.1 percent decline for the week, the most since September.

Urals crude, the country’s main export blend, fell 2.7 percent to $110.99 yesterday, the lowest level since Jan. 31.

“When the market loses the support of high oil prices and positive economic data, it finds itself in free fall,” Ivanischev said. The Micex may extend declines, retreating to 1,330 “in a few days,” Ivanischev said.

The Micex will be open for trading during public holidays on May 7 and 8 and closed on May 9.

Raspadskaya fell 2.4 percent to 84.89 rubles, the lowest intraday level since Oct. 13. That took its slide this week to 13 percent, the biggest drop in the period since Nov. 9. Rusal dropped 1.8 percent to 201.01 rubles, the lowest intraday level since Jan. 11.

The MSCI Emerging Markets Index (MXEF) dropped 0.6 percent this week to 1,012.96, its seventh straight weekly slump and the longest string of weekly declines since 2008.

Russian stocks trade at 4.9 times estimated earnings, having lost 1.1 percent this year. That compares with a 10 percent gain for the MSCI Emerging-Market Index which trades at 10 times projected earnings.

Trading volumes on the Micex slumped 30 percent in April from the month before compared with a 22 percent drop in the same period a year earlier, Bloomberg reported.