Russian stocks, rouble edge up as Syria tension subsides
MOSCOW Aug 29 (Reuters) - Russian stocks rose on Thursday after a four-day losing streak, with metals and mining stocks outperforming as the market focused on core earnings rather than bottom-line losses in second quarter results.
Pressure on risky assets worldwide eased after British and U.S. lawmakers raised objections to possible Western military strikes against Syria over last week's suspected chemical weapons attacks in which hundreds of deaths were reported.
The dollar-traded RTS share index was up 0.3 percent at 1,303 points and the rouble-denominated MICEX rose by the same margin to 1,374 points.
The MICEX metals and mining index, heavily sensitive to risk sentiment, rose by 0.9 percent, on a busy day for company results.
Steelmaker Evraz posted a second-quarter loss but its shares rose by 5 percent in London after core earnings beat expectations. The company may pay an interim divided if it can complete asset disposals.
Severstal rallied by 2.4 percent in Moscow even as it swung to a worse-than-expected net loss due to forex losses. Earnings before interest, taxation, depreciation and amortisation posted a double-digit gain.
"Reports from Severstal and Evraz were better than the expected ... If we compare their earnings before interest, taxes, depreciation and amortisation (EBITDA) to market forecasts for this year, then Severstal has (already) fulfilled 48 percent, Evraz 52 percent," said Vladimir Dorogov, an analyst at Alfa-Bank.
Prices for oil - Russia's top export commodity - and central bank interventions on the currency market buoyed the rouble, which, however, remained close to four-year lows against the dollar-euro currency basked eyed by the central bank.
The rouble has escaped the heavy selling that has hit other emerging market assets, as the higher cost of oil implies a stronger current account surplus and budget revenues.
The rouble was flat against the dollar at 33.20 . The rouble lost 0.5 percent over the week so far despite a 0.4 percent rise in oil prices. The rouble rose 0.6 percent on Thursday versus the euro at 44.03.
The rouble was up 0.4 percent at 38.06 to the dollar-euro basket used by the central bank to guide its interventions, but still close to its lowest since September 2009.
A combination of a weaker rouble and high oil prices makes investors more cautious towards domestic sectors, such as banks and telecoms.
The Economy Ministry cut its 2013 growth forecast this week to 1.8 percent - the slowest pace since recession in 2009
Sberbank Investment Research upgraded the Russian oil sector "that outperforms at times of risk aversion thanks to low valuations with 12-month earnings expectations at 5.6".
"This environment does not favour the low-growth domestic sectors of banks and telecoms, as they do not enjoy fast enough growth rates to outpace the rouble's decline," the strategists said in a note.
"We stick with our long-standing 1,350 year-end RTS Index target, but note that we will upgrade this if the conflict in the Middle East continues to escalate".
Shares in Rosneft rose 1.1 percent, while oil prices hovered at $115 per barrel.
(Reporting by Maya Dyakina; Editing by Douglas Busvine/Ruth Pitchford)
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