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By Bloomberg

The ruble gained for a second day amid speculation oil’s recovery last week signaled the worst of the declines may be over and as Standard & Poor’s delayed its decision on the nation’s credit score. Stocks extended their longest rally since November.

The currency strengthened 1.3 percent to 64.377 as of 2:19 p.m. in Moscow. The Micex stock index added as much as 2.3 percent led by OAO Lukoil and OAO Gazprom. Lenders also rose as the Bank of Russia said it intends to use historical credit ratings in its regulation.

Brent jumped 5.2 percent on Friday following a seven-week stretch of losses in London, boosting optimism prices will stabilize and ease pressure on the ruble. While the currency has tumbled 48 percent in the past year, weighing on the economy and hurting dollar earnings of publicly-traded companies, its weakness has boosted the proceeds of oil and gas producers.

“Oil seems to have stabilized around $50 and rebounded strongly” last week, Anvar Gilyazitdinov, a fund manager at Rye, Man & Gor in Moscow, said by phone. “The stock market strength lies in exporters, commodity producers and oil stocks because of the relatively weak ruble.”

Moody’s Investors Service on Friday lowered Russia to Baa3, one step above junk. S&P said Jan. 16 it will decide whether to cut Russia to junk by the end of January, removing speculation a decision would come at the end of last week.

S&P Delay

“S&P delayed its decision about Russia’s credit rating despite negative expectations, and the market is celebrating that,” Gilyazitdinov said.

Russia’s dollar bonds due March 2030 rose for a fifth day, lowering the yield 2 basis points to 6.78 percent.

Shares of OAO VTB Bank advanced 3.2 percent, taking a three-day gain to 12 percent. OAO Sberbank, Russia’s largest lender, climbed 2.6 percent to the highest since Jan. 8 on a closing basis. The Bank of Russia said today it will use pre- March 2014 ratings for lenders and securities issued by banks and pre-December 2014 ratings for other entities and their securities.

“The central bank move helps banks because it lifts the pressure off capital requirements,” Natalia Berezina, a banking analyst at UralSib Capital, said by phone. Policy makers are “trying to smooth out negative factors so that there’s no panic, but these measures are short-term,” she said.

Exporters Climb

Oil producer Lukoil surged as much as 3.4 percent in its longest stretch of gains since the six-day period ended Nov. 21. Gazprom, the state-run natural-gas export monopoly, increased for the fifth day to 152.24 rubles, taking its advance in the period to 8.5 percent. Brent rose as much as 0.4 percent today before erasing gains to trade 0.6 percent lower at $49.85.

OAO Alrosa, the world’s biggest diamond producer by output, jumped 3.7 percent. The stock was raised to buy from sell at Renaissance Capital Ltd. on earnings prospects after the ruble’s slide.

The dollar-denominated RTS Index added 3.2 percent to 794.21 after last week slipping 1.6 percent.

“We are seeing short covering across RTS Futures today driven mostly by locals,” Luis Saenz, the head of equity sales and trading in London for Moscow-based BCS Financial Group, said in an e-mailed note. “Looks like this uptick in Russia today is due to the halt in oil’s free-fall.”