Azernews.Az

By Bloomberg

U.S.-traded Russian stocks slid for a sixth day, the longest losing streak this year, as data showed manufacturing fell more than forecast and oil retreated, damping the economic outlook in the world’s biggest energy exporter.

OAO Gazprom retreated 3.3 percent to a two-month low after RIA Novosti reported that the natural-gas producer’s exports to Europe have dropped 10 percent this year. OAO Lukoil tumbled the most since late January as Brent crude ended a two-day advance. TV broadcaster CTC Media Inc. sank to the lowest in six years. The Bloomberg Russia-US Equity Index slid 1.4 percent.

Stocks tumbled after a manufacturing gauge from HSBC Holdings Plc and Markit Economics showed a larger-than-forecast contraction last month. The government, in a separate report, said gross domestic product shrank 4.2 percent in April from a year earlier, following a 2.7 percent decline in the prior month. The data blunted speculation that what economists expect to be Russia’s first recession since 2009 will be milder than previously forecast.

“The optimism that drove the market earlier this year -- that oil prices will rebound and geopolitical tensions will ease -- is long priced in and not enough anymore to cause a rally in Russian stocks,” Vadim Bit-Avragim, a money manager at Kapital Asset Management LLC in Moscow, which oversees 175.4 billion rubles ($3.3 billion), said by phone. “You have the macroeconomic pressure that isn’t going anywhere, and you have fewer hopes that the oil price will rally from current levels, and this puts pressure on the market.”

2015 Rebound

The Bloomberg index of U.S.-traded Russian stocks has rebounded 20 percent this year as investors bet stocks were undervalued after plunging oil prices and international sanctions linked to the Ukraine conflict pushed the gauge to a 52 percent decline in 2014. While a cease-fire is in effect in Ukraine, sporadic fighting continues in the former Soviet republic.

Brent crude fell 1 percent to $64.88 a barrel on Monday. While the oil grade traders use to price Russia’s main export blend has slid 4.1 percent from this year’s high, it’s still up 39 percent from a six-year low in January. The World Bank on Monday said it forecasts a 2.7 percent contraction in the country’s GDP this year, down from a previous projection for a 3.8 percent decline, citing stabilizing crude prices.

Gazprom retreated to $5.19. Lukoil slid 3.8 percent to $45.95. CTC Media dropped 2.2 percent to $3.13. The Bloomberg gauge of U.S.-traded Russian stocks slumped to 59.30.

The Market Vectors Russia ETF, the largest U.S. exchange- traded fund tracking the nation’s stocks, decreased 3.1 percent to $18.37. Futures on the dollar-denominated RTS Index expiring in June slipped 0.4 percent to 94,920 in U.S. hours.

Moscow-based United Co. Rusal, the world’s biggest aluminum producer, gained 0.7 percent to HK$4.20 at 11:03 a.m. in Hong Kong.