MOSCOW, Nov 20 (Reuters) - Russian corporate woes dragged Moscow shares lower on Wednesday as some investors kept to the sidelines awaiting further clarity on when the U.S. Federal Reserve may start to wind down its stimulus programme.
Coal miner Mechel, which has had difficulty restructuring its $9.6 billion in debt, fell a further 1.9 percent and now trades some 30 percent below levels seen earlier this month.
Shares of the state-controlled telecoms operator Rostelecom also traded 1.9 percent lower on reports of a delay in government approval of its joint-venture with Tele2 Russia.
The declines took their toll on the wider Moscow Exchange, with the dollar-denominated RTS index trading 0.7 percent lower at 1,445 points. The rouble-traded MICEX was down 0.6 percent at 1,502 points.
The rouble traded near one-week lows on Wednesday, trading unchanged on the day against the dollar at 32.75. It was 0.1 percent weaker at 44.35 against the euro.
This left the rouble virtually unchanged against the dollar-euro basket at 37.97.
Rostelecom plans to contribute its wireless business to an alliance with Tele2 Russia, a former unit of Sweden's Tele2 now owned by VTB and investors led by banker Yuri Kovalchuk, a long-time associate of President Vladimir Putin.
JOINT VENTURE DOUBTS
But on Wednesday, the daily Kommersant reported that the government had not sent its decision to the company's board of directors, which had been due to approve the merger on Tuesday.
'The potential integration of Rostelecom's mobile assets with Tele2 will be a strategically logical development for Rostelecom,' analysts at Uralsib wrote in a note.
'However, it appears the creation of the joint-venture is still in doubt and we expect Rostelecom stock to be driven by contradictory news flow rather than fundamentals in the short term,' they said.
Investors were also awaiting clues on the U.S. withdrawal of its stimulus programme, with the minutes of the Fed's October policy meeting due to be published later on Wednesday.
However, with signs that other central banks may still continue pumping money into the markets, the decline on the Moscow Exchange may not be long-lasting, analysts said.
'In recent days we have increased the proportion of shares in our portfolio as potential for market growth remains, given the willingness of central banks to stimulate the economy,' analysts at Promsvyaz investment company wrote in a note.
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(Additional reporting by Maya Nikolaeva; Writing by Lidia Kelly; Editing by Gareth Jones) Keywords: RUSSIA MARKETS/
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