Russia's Micex Climbs, Erasing Earlier Decline; Lukoil Advances

By William Mauldin

Aug. 11 (Bloomberg) -- Russia's Micex Index advanced, erasing its earlier decline, after President Dmitry Medvedev said the military had completed a ``significant'' part of its operations in the breakaway Georgia republic of South Ossetia.

OAO Lukoil, Russia's second-biggest oil producer, and OAO Gazprom, the world's largest natural-gas producer, rallied as oil prices climbed from a 14-week low.

The ruble-denominated Micex gained 1.5 percent to 1,379.81 at 1:37 p.m. in Moscow after earlier falling as much as 5.7 percent. The dollar-denominated RTS Index added 0.3 percent to 1,728.46 after sliding as much as 4.3 percent.

Five days of clashes between Georgia and Russia have left scores of people dead and threatened to disrupt a major energy transport route. U.S. President George W. Bush has condemned the Russian bombings as the European Union intensified diplomatic efforts to end the violence in South Ossetia and fighting threatened to engulf a second breakaway region.

Russia has taken under control Tskhinvali, the South Ossetian capital, Medvedev said during a meeting with Defense Minister Anatoly Serdyukov, the state-run news service RIA Novosti reported.

Lukoil climbed 3.6 percent to 1,904.80 rubles. Gazprom added 3.8 percent to 253 rubles.

Crude oil for September delivery gained as much as $1.70, or 1.5 percent, to $116.90 a barrel in electronic trading on the New York Mercantile Exchange.

To contact the reporter on this story: William Mauldin in Moscow at wmauldin1@bloomberg.net.