Russian Stocks’ Oil Link Gains on Eased Ukraine Concern - Bloomberg

Russian Stocks’ Oil Link Gains on Eased Ukraine Concern - Bloomberg:



"Russian stocks are showing the strongest link to oil prices in more than a year as concern that the Ukraine crisis will escalate fades and investors focus on a main driver of economic growth.



The dollar-denominated RTS stock index rose 4.9 percent in Moscow last week, pushing its 35-day correlation coefficient with West Texas Intermediate crude to 0.53, the highest since May 2013. A reading of 1 implies two securities are trading in lockstep, while -1 signals the opposite.



Oil is Russia’s top export and along with natural gas contributes about half its budget revenue. The RTS index had a negative correlation coefficient of as much as 0.37 in March as stock-market volatility surged during the country’s standoff with Ukraine. The link between crude and equities is returning to more typical levels as tensions ease. President Vladimir Putin met with the former Soviet republic’s new leader on June 6, easing concern that the conflict will intensify.

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