Russian Stocks Under Pressure

From Bloomberg today:

Russian Stocks Decline, Led by Sberbank, VTB, Norilsk Nickel

By William Mauldin

Aug. 10 (Bloomberg) -- Russian stocks fell on concern that a widening credit crunch may spread through the financial system, reducing investor appetite for riskier assets in emerging markets.

OAO Sberbank, VTB Group and OAO GMK Norilsk Nickel led the decline as the ruble-denominated Micex Index sank 1.3 percent to 1654.18 at 1:05 p.m. in Moscow. Five stocks advanced and 25 retreated. The dollar-denominated RTS Index slipped 1.3 percent to 1913.17.

Since touching a record on July 23, the Morgan Stanley Capital International Emerging Markets Index has fallen 9.7 percent on concern that the rout in U.S. subprime mortgages may ripple through the credit markets and hurt the economy. The European Central Bank said today that it will launch a three-day tender to add liquidity to the money market after overnight interest rates spiked yesterday.

``The fact that the current turmoil and crisis of confidence in credit is spreading into the money market, which is the backbone of both the capital markets and the financial system at large, is a very disturbing development,'' wrote Alexei Zabotkin, chief strategist at Deutsche Bank AG in Moscow, in a note today.

Sberbank, Russia's biggest bank, retreated 1.9 percent to 97.25 rubles on the Micex Stock Exchange. VTB Group, the second- biggest publicly traded lender, dropped 1.9 percent to 12.97 kopeks, a record low. A kopek is one hundredth of a Russian ruble.

Norilsk Nickel, Russia's biggest mining company, fell 1.7 percent to 5,209 rubles. Nickel prices hit new a 10-month low, falling 0.4 percent to $26,900 a metric ton on the London Metal Exchange.

Russian oil companies fell after crude slipped for a third day in New York. Oil for September delivery dropped 62 cents, or 0.9 percent, to $70.97 a barrel in after-hours electronic trading on the New York Mercantile Exchange. The Micex Oil & Gas Index dropped 1 percent.

OAO Lukoil, Russia's second-biggest oil producer, fell 1.3 percent to 1,934.99 rubles.