Russia Stocks to Ruble Rally on Relief Sanctions Weren’t Tougher
By Vladimir Kuznetsov and Ksenia Galouchko Jul 30, 2014 7:01 AM ET
Russian stocks gained and the ruble strengthened for the first time in five days as some investors saw U.S. and European Union sanctions as milder than anticipated.
The benchmark Micex Index (INDEXCF) added 2.2 percent to 1,400.39, the strongest advance in more than a month. Russia’s currency rose 0.5 percent to 35.6240 per dollar as of 2:17 p.m. in Moscow. That pared its decline in July to 4.6 percent, the steepest monthly loss since January and the worst decline in the period among 24 emerging-market peers tracked by Bloomberg.
EU governments agreed on sanctions against Russia yesterday that prevent state-owned banks from selling shares or bonds in Europe, restrict the export of equipment to modernize the oil industry and bar export of equipment with military uses. That was followed hours later by U.S. penalties against three Russian banks, including VTB Group, and a state-owned shipbuilder. OAO Sberbank, Russia’s biggest lender, wasn’t on the U.S. list.
“The markets were preparing for a much worse” outcome, Luis Costa, a London-based strategist at Citigroup Inc. in London, said in e-mailed comments. “The fact that Sberbank was not on the list suggests the EU and the U.S. continue to be very gradual with their sanctions approach.”
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http://www.bloomberg.com/news/2014-07-30/ruble-gains-1st-day-in-5-as-sanctions-seen-milder-than-expected.html