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Russia's MICEX loses key support level, rouble down
September 26, 2012 / 9:02 AM / 5 years ago

Russia's MICEX loses key support level, rouble down

* MICEX below key 1,480 points level
    * Shares pressured by global pessimism
    * Rouble down on sliding oil
    * Demand seen weak at bonds auction

    By Lidia Kelly
    MOSCOW, Sept 26 (Reuters) - Russia's rouble-denominated MICEX dropped below
a key support level on Wednesday, with slipping crude prices and waning
confidence of investors in the health of global economy pushing Moscow assets
down across the board.
    At 0820 GMT, MICEX was trading 1.7 percent down at 1,457.36 points,
falling below 1,480, a level analysts saw as important for deciding future bets.
    "Russian 'bulls' (lost) the growing momentum," Andrei Tolstousov, head of
asset management at Grandis Capital, wrote in a note. 
     Tolstousov reckons, that with Moscow's trading behaviour staying so acutely
sensitive to developments on global markets, MICEX can go down now to as low as
1,430 points - a level seen last in early September before the markets' euphoria
on a new stimulus by the U.S. Federal Reserve.
    Russia's rouble-traded index RTS also fared badly on Wednesday,
losing 2.5 percent on the day to trade at 1,473.05 points.
    "The key factor, which now has an effect on market shares is coming from
awaiting confirmation of the effectiveness or ineffectiveness of the stimulus
actions taken by central banks across the world," Igor Nuzhdin, at Nomos Bank,
said.
    The Russian bourses underperformed the broad emerging markets MSCIEF index
 which was down 1.0 percent, behaviour typical of a beta market that
outperforms when there is wide global optimism and quantitative easing but
underperforms when risk aversion returns.
    Steel and mining shares were among the top losers as has been traditional
when investors start ditching risky assets. The metal and mining index 
on the MICEX exchange was down 2.7 percent.
    The Russian rouble shared the fate of Moscow assets, losing additional
firming support from the monthly liabilities payments that peaked on Tuesday. 
    Dropping crude prices - Russia's chief exports - intensified the rouble's
slide. Front-month Brent futures have fallen below $110 a barrel, their
second drop in three days, on worries that a fragile global economy could hit
demand.
    The rouble was 0.9 percent down at 31.25 against the dollar on
the day. It lost 0.15 percent versus the euro to trade at 40.17 
and it was down 0.53 percent at 35.26 against the dollar-euro basket 
the central bank uses to guide the rouble's nominal exchange rate.
    The souring mood bodes poorly for the finance ministry's weekly OFZ treasury
bonds sale, where 20 billion roubles ($646.20 million) worth of five-year papers
 are to be auctioned.
    The finance ministry wants to sell the bonds at a yield of between 7.50 and
7.55 percent. The bonds closed on Tuesday at 7.54 percent and were yet to be
traded on Wednesday.
    Analysts expect scarce demand for the bonds from non-residents, who have
been buying heavily into the Russian domestic debt for most of this year.
    "And the demand from local players will also be limited due to the weakening
of the rouble and rising interest rates on the money market," analysts at ING
Bank in Moscow said.   
 Russian                              Latest  Net Change  % Change  % Change on
 Markets                                                                   year
 STOCKS                                                                        
 MICEX                               1457.36      -25.25     -1.70        3.93 
 RTS                                 1473.05      -37.91     -2.51        6.60 
 London ADRs                          853.03      -22.87     -2.61        9.58 
 Emrg Mkt Indx                        991.97       -9.88     -0.99        8.25 
 MSCI Russia                          791.99      -20.41     -2.51        7.50 
 Sberbank                              92.69       -1.06     -1.13       17.54 
 VTB                                    0.05       -0.00     -2.40       -7.69 
 Gazprom                              157.96       -2.91     -1.81       -7.79 
 LUKOIL                              1917.40      -22.80     -1.18       12.62 
 Rostelecom                           133.48       -3.52     -2.57      -12.18 
 Dollar/Rouble                         31.25        0.29      0.93       -2.80 
 Euro/Rouble                           40.17        0.06      0.15       -3.77 
 Rouble basket                         35.26        0.19      0.53       -3.30 
 DEBT                                    Bid         Ask      %Rtn       Coupon
 Russia 10-yr                           7.81        7.78      0.12         7.60
 bond                                                               
 MONEY MARKET                            Bid         Ask     Close             
 Overnight                              6.40        6.90      6.05             
 rate                                                               
 TABLE FROM POWER PLUS PRO
    
All data taken from Reuters at 0820 GMT
($1 = 30.9502 Russian roubles)

 (Reporting by Lidia Kelly; editing by Stephen Nisbet)

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