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. Last Updated: 07/27/2016

Stocks Continue Major Rally

Russian stocks extended the longest rally in 11 months as higher oil and metals prices boosted earnings prospects for commodity producers and Prime Minister Vladimir Putin traveled to China to strengthen exports.

Oil producer Surgutneftegaz and miner Norilsk Nickel rose more than 3 percent as oil climbed above $73 per barrel. Gazprom jumped 6.1 percent as government officials negotiate a deal that could make China the company’s biggest customer for gas.

The 30-stock MICEX Index added 3.8 percent to 1,357.44, the highest level since September 2008.

The MICEX has more than doubled this year as oil and metals surged on speculation that the global economic recovery will boost demand for commodities. Even after the gains, stocks trade for 9.9 times the average of analysts’ estimates for 2010 earnings, the cheapest level among major emerging markets, according to Bloomberg data.

“Russia appears to be the favorite market for the cash-rich and the more risk-prone investors,” said Peter Westin, chief strategist at Aton Capital.

The country’s shares have rallied 15 percent in six days, the longest winning streak since November 2008, as brokerages raised price estimates for energy and financial shares and Auerbach Grayson predicted equities would climb another 27 percent.

The ruble gained 0.3 percent to 29.53 per dollar, and was up 0.1 percent versus the euro at 43.60. It was at 35.86 against the Central Bank’s target basket.