Russian stocks and the ruble fell the most in a week as commodities declined on concern that Europe’s deficit crisis will derail a recovery and a report showed that Russian-focused funds posted outflows.
Severstal, the country’s largest steelmaker, lost 3.6 percent after reporting an unexpected $785 million first-quarter loss. Oil producer Rosneft slipped 2.5 percent to 220.89 rubles. The MICEX Index fell 1.9 percent to 1,352.01 at the close in Moscow, paring the week’s gain to 4.9 percent.
The ruble weakened 0.5 percent to 30.16 per dollar by the close in Moscow, bringing its weekly gain to 1.2 percent, and slipped 0.2 percent to 37.79 per euro. The movements left the currency at 33.59 against the Central Bank’s target currency basket, which is used to manage swings that hurt Russian exporters.
Lower oil prices will put pressure on the ruble, Chris Weafer, chief strategist at UralSib, wrote in an e-mailed note Friday. Oil retreated as much as $1.68 to $72.72 a barrel in New York.
Emerging market equity funds had a second straight week of redemptions as Europe’s sovereign-debt crisis dented demand for riskier assets and concern mounted that a $1 trillion bailout package would fail, EPFR Global said. Investors focused on Russia withdrew $203 million in the week to May 12, the first outflow in 13 weeks, according to Alfa Bank, which cited the EPFR data.
“The European Central Bank is not willing to go for a U.S. bailout, that’s why the markets are going back into sell mode,” said Vladimir Osakovsky, an economist at UniCredit.
Russian stocks, the world’s best performers last year as an economic recovery boosted the earnings outlook of oil and metals producers, have retreated 12 percent from their April 15 peak amid concern that economic growth may slow.