Oct 28 (Reuters) – Russian shares rose on Monday after posting the biggest weekly loss in four months, with growing Russian retailer Magnit outperforming following stronger-than-expected third quarter earnings.
At 0937 GMT, the rouble-denominated MICEX index was up 0.4 percent at 1,511 points. The dollar-denominated RTS 0.3 percent higher at 1,496 points after falling by 1.6 percent in the previous week, it worst performance since end-August.
Expectations that the U.S. Federal Reserve will make no changes to its $85 billion monthly bond-buying programme this week buoyed Russian assets.
Stocks in Magnit rose 1.4 percent after the retailer posted a 42 percent rise in net profit for the third quarter.
Investors have seen strong potential in Magnit, whose share price has risen 77 percent year-to-date, as it recently became the largest Russian food retailer by sales by targeting the provinces of the world’s largest nation by area.
The market is watching the earnings season closely with the world’s largest listed oil company by output, Rosneft reporting results on Tuesday. Rosneft shares added 0.3 percent.
Russian state-owned diamond miner Alrosa proceeded with its IPO, expecting to raise $1.3 billion.
“An important item to consider in Alrosa is possible MSCI (index) inclusion which could happen as early as the upcoming Nov. 15 rebalancing decision,” Kirill Yankovsky, head of international sales at Uralsib Capital, said in a note.
The rouble edged down on Monday, as support from the tax payment period gradually waned, while investors awaited the results of U.S. Fed policy meeting on Wednesday.
The Russian currency was down 0.1 percent against the dollar at 31.80 and was flat at 43.93 versus the euro , leaving it 0.1 percent weaker at 37.26 against the dollar-euro basket monitored by the central bank.
Analysts say the Fed could stand pat for the rest of the year, providing demand for riskier emerging market assets.
Russian assets were less hit than emerging market peers this summer on concerns about the U.S. stimulus tapering, as strong oil prices provided a stable current account surplus.
Brent crude prices edged up on Monday to above $107 per barrel after falling 2.7 percent last week, its biggest weekly decline in a month.
“This level of oil price ($107 per barrel) corresponds to 31.8 roubles for the U.S. dollar,” Dmitry Savchenko, an analyst at Nordea said in a note.
“However, deteriorating macroeconomic data tells us that rouble should be somewhere lower as risks of lower economic growth are high”.