Low oil price, Moscow–Ankara tensions drag Russian stocks down

MOSCOW, Nov 27 (PRIME) -- The unrelenting tensions between Moscow and Ankara over the Su-24 bomber shooting down by Turkey in Syria on Tuesday, the low oil price and a fall of the ruble’s exchange rate pushed Russian stock indices down on Friday, analysts said.

The MICEX fell 1.78% to 1,795.70 and the RTS decreased 2.10% to 856.30.

“The downward momentum of the Russia stock market has received a boost today. This was supported by negative mood at the European floors, the oil price fall that sank below the U.S. $45 per barrel mark, and the development of events around the Russia–Turkey conflict,” Igor Kovalyov, an analyst at InstaForex, said.

Russia decided to abolish its visa-free regime with Turkey from January 1, 2016, and the Russian government will prepare a list of economic sanctions in retaliation against Turkey’s actions by Saturday.

“It was already evident yesterday that one of the conflict’s side will be an administrative worsening of cooperation with Turkish companies. And it will lead to unfavorable economic consequences for several top Russian issuers that have a significant share in the MICEX index,” Vitaly Manzhos, a senior analyst at Bank Obazovanie, said.

The oil price slightly retracted later, but it was still down 0.596% to $45.19 per barrel as of 6.10 p.m. Moscow time, according to the ICE exchange.

“The oil in minus and the weak ruble defined the mood of the trade’s participants,” Andrei Kochetkov, an analyst at investment company Otkritie Broker, said.

A sale of shares in China also became negative factors for the Russian stock market. “Key indices there plunged 5–6% on news of falling profits in the industry and on news that two large Chinese brokerage firms became subjects of a regulator’s investigation,” Vasily Tanurkov, a deputy head of investment company Veles Capital’s stock market analysis department, said.

Shares of Russia’s second biggest bank VTB lost 4.33% to 0.07271 rubles. Despite receiving a 3 billion ruble net profit in October, the bank still swung to a 7.9 billion ruble net loss in January–October against a 4 billion ruble net profit in the same period a year ago, as calculated under International Financial Reporting Standards (IFRS).

Below are the MICEX’s five most active stocks on Friday:

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	-1,81	104.55	9.778
Gazprom	-1.78	140.65	4.208
Lukoil	-2.28	2539.40	3.319
Norilsk Nickel	-1.81	9220.00	2.278
Magnit	-0.96	12013.00	1.696

(65.6836 rubles – U.S. $1)

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