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. Last Updated: 07/27/2016

Stocks Fall On Lower Oil Prices

Stocks fell Tuesday after oil declined from a one-year high and shares reached the most expensive level on record.

LUKoil and Rosneft, the country’s largest oil producers, were the biggest drag on the MICEX Index, pulling the benchmark gauge down 0.3 percent to 1,361.75. The index reversed earlier gains of as much as 1.7 percent. Crude fell 0.9 percent to $78.87 a barrel at the close of equity trading in Moscow.

Shares swung between gains and losses Tuesday as oil rallied above $80 for the first time since October 2008. The MICEX dropped to its low of the day as oil retreated, U.S. housing starts rose less than economists’ had forecast and building permits dropped in the world’s biggest economy.

“The risk of any disappointing corporate or economic news in the U.S. causing a major correction in all markets is now very high,” Chris Weafer, chief strategist at UralSib, wrote in an e-mail. “While valuations and the risk of a quick fall are high, investors are equally worried about missing out on further gains. That sentiment conflict keeps most investors awake at night, a case of ‘damned if you stay in and damned if you sell.’”

The MICEX has more than doubled this year as oil and metals prices surged on speculation that the global economic recovery would boost demand for raw materials. The gauge closed Monday valued at 16.1 times reported profits, the highest level since at least July 2003 when Bloomberg data began.

LUKoil, the nation’s second-biggest producer, lost 1.3 percent to 1,923.23 rubles. Rosneft fell 1.1 percent to 245.68 rubles. The two stocks make up almost a quarter of the MICEX. Gazprom Neft, the oil arm of Gazprom, slumped 2.7 percent to 165.73 rubles.

VTB Group, the country’s second-biggest bank, fell 1.4 percent to 6.54 kopeks before the company reports earnings Wednesday. VTB’s second-quarter results will probably “remain weak,” with the company reporting its fourth quarterly loss in a row, Renaissance Capital wrote in a report.