Russian shares rise on Ukraine news, strong oil, ruble, global stocks

MOSCOW, Oct 5 (PRIME) -- Russian stocks increased on Monday, supported by a decision to withdraw troops in eastern Ukraine, stronger oil prices, the ruble and a firming global stock market, analysts said.

The MICEX rose 2.47% to 1,652.47 and the RTS increased 5.25% to 805.12.

“There is a range of reasons for optimism today. Firstly, a decision was made to withdraw troops from the line where separatists are located after a meeting in the Normandy format on maintaining armistice in Ukraine … This is a chance that the situation in the east of Ukraine stabilizes. The absence of a threat of new sanctions lead to a surge of optimism on the market,” Andrei Dirgin, the head of the analytical department at Alfa-Forex, said.

The oil price strengthening to above U.S. $49.5 per barrel of Brent by the closing bell supported Russian stocks, according to the analyst. The number of U.S. drilling platforms fell by 26 units last week, according to calculations of Baker Hughes, that backed oil, Dirgin said.

The dollar-denominated RTS was also technically supported by the ruble strengthening, according to Dirgin.

Russian stocks were also backed by a positive mood on the global stock market: the growth of U.S. trading floors was followed by a rise of European stock indices, and revival of raw materials markets, Vasily Tanurkov, the deputy head of the Veles Capital’s department for stock market analysis, said.

Companies focused on the national market gained from the ruble strengthening: telecom giant Rostelecom rose 5.84% to 89.65 rubles, Internet giant Yandex grew 6.16% to 775 rubles and hydropower major RusHydro rose 4.22% to 0.607 rubles, Tanuarkov said.

Oil companies, which grew on the back of the positive oil price dynamics, were also supported by government’s signals that it will raise the mineral extraction tax (MET) in the oil industry less than was initially proposed by the Finance Ministry, the analyst said.

Tatneft gained 5.33% to 316.9 rubles, Surgutneftegas rose 5.11% to 35 rubles and oil major Rosneft increased 4.01% to 244 rubles.

Fertilizer producer Uralkali fell 1.97% to 179.15 rubles after international rating agency Fitch decreased its long-term issuer default rating (IDR) to BB-, according to Tanurkov.

Troubled airline Transaero, which cancelled 33 flights scheduled for Tuesday, plummeted 46.67% to 8 rubles.

Below are the MICEX’ five most active stocks on Monday:

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	+3.25	76.20	7.570
Gazprom	+4.03	136.80	5.245
Lukoil	+2.62	2196.00	3.506
Norilsk Nickel	-0.21	9450.00	2.630
Magnit	+1.24	11725.00	1.228

(65.9414 rubles – U.S. $1)

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