Global trade wars, falling oil price weigh upon Russian stocks

MOSCOW, Aug 1 (PRIME) -- Russian stocks contracted on Wednesday as global trade wars dragged the international floors in the red zone, and contraction of oil prices provided no support to local bulls, analysts said

The MOEX Russia Index fell 0.26% to 2,315.18 and the RTS decreased 1.11% to 1,160.09.

“More news on trade wars between the U.S. and China resulted in sales on the global market. The Wall Street Journal published an article depicting the persistence of U.S. President Donald Trump’s advisers on raising tariffs on Chinese imports worth U.S. $200 billion to 25%,” Andrei Kochetkov, an analyst at Otkritie Broker, said.

Lower trade turnover between the two countries may undermine demand for many goods that Russia exports, including energy and metals, Kochetkov said.

“The piece of news was expected, but the market expected the duty on $200 billion worth of goods would amount to 10%, while now it may reach 25%...We also had another interesting piece of news saying that Germany is ready to join the U.S. trade war. It became known that Germany is ready to veto acquisition of one of German companies by Chinese investors,” Vasily Oleinik, an analyst at investment company Finam, said.

This means that the E.U. has begun building barriers for Chinese investors, and it may follow the U.S. and impose duties on Chinese goods. China also warned Washington this morning that retaliation for higher import duties will be immediate, Oleinik said.

Kochetkov said that energy resource exporters and metals companies were among the losers. Gas giant Gazprom fell 1.15%, oil major Rosneft contracted 0.57%, metals giant Norilsk Nickel decreased 0.92%, and steelmaker Severstal fell 0.68%.

Shares of power utility Mosenergo gained 0.35% on a report that the company’s net profit rose 5% to 15.457 billion rubles in January–June as calculated under Russian Accounting Standards (RAS), he said.

Ivan Marchena, an analyst at investment company Forex Club, said that shares of Bank Saint Petersburg gained 8.68% after Deputy CEO Konstanting Balandin said that the bank’s supervisory committee may approve a $10 million share buyback.

Below are the MOEX Russia Index’ five most active stocks on Wednesday:

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	-1.98	210.60	8.004
Gazprom	-1.15	142.14	2.609
Lukoil	+0.95	4494.00	2.299
Rosneft	-0.57	416.60	1.257
Magnit	+1.43	4187.00	1.173

(62.3497 rubles – U.S. $1)

End