Stocks and the ruble gained the most in more than four months on Tuesday, as trading resumed after a public holiday that saw emerging markets rally the most in a year on Europe’s aid package for Greece. Sberbank and VTB Group, the country’s biggest lenders, jumped more than 6 percent. Steelmaker Novolipetsk Steel surged 11.4 percent. The MICEX Index added 3.5 percent to 1,334.15 at the close, its biggest gain since Jan. 11. The ruble advanced 1 percent to 30.2350 against the dollar. Russian markets were closed for a public holiday Monday.
Stocks rebounded after tumbling 10 percent last week on concern that Europe’s deficit crisis will slow the economic recovery and damp demand for oil, Russia’s key export earner. “We are seeing a catch up,” Tom Mundy, a strategist at Renaissance Capital, said by phone. “But there is still some skepticism that the rescue package doesn’t rein in the spending of these peripheral European countries.”
Russian stocks, the world’s best performers last year as an economic recovery boosted the earnings outlook of oil and metals producers, have retreated 13 percent from their April 15 peak on concern that economic growth may slow.
“The key substantive risk to the Russian story is a series of Lehman-style collapses in Europe leading to major falls in commodity prices,” said Kingsmill Bond, chief strategist at Troika Dialog. “By agreeing to provide such large bailout funds, the likelihood of a series of sovereign defaults in Europe has been reduced, or at least postponed.”
