Low oil prices, negative environment weigh upon Russian stocks

MOSCOW, Feb 9 (PRIME) -- Russian stocks fell on Tuesday on low oil prices, pessimism from external trade floors and a recent increase of geopolitical tensions around Moscow, analysts said.

The MICEX fell 1.20% to 1,723.36 and the RTS decreased 1.94% to 690.37.

“The Russian stock market continued its fall on Tuesday following a contraction of oil prices and sales at external trading floors,” Alexander Kostyukov, an analyst at investment company Veles Capital, said.

On Monday, oil ministers of Venezuela and Saudi Arabia discussed ways to stabilize the oil market, but were unable to reach any significant progress. This resulted in a decrease of oil prices due to improvement of investors’ pessimistic views regarding the next meeting of OPEC representatives, Kostyukov said.

The Brent oil price fell 0.274% to U.S. $32.79 per barrel as of 6.18 p.m. Moscow time, according to the ICE exchange.

“It looks like the today’s fall of the local market was prompted by negative dynamics of main European stock markets and of contracts for U.S. stock indices. It is worth mentioning that the MICEX index has renewed its 2-week minimum, which is also a negative technical signal that promotes further sales,” Vitaly Manzhos, a senior analyst at Bank Obrazovanie, said.

The geopolitical tensions around Russia also strengthened today. “It especially concerns the Syrian crisis, where serious disputes emerged between Russia and Germany,” Artyom Zvyagilsky, a leading analyst at MFX Broker, said.

On Monday, German Chancellor Angela Merkel expressed outrage over Russian-backed attacks in Syria as it drove thousands of civilians to the Turkish border, suggesting the attacks were made in violation of a UN Security Council resolution that Moscow signed in December 2015.

Low oil prices pushed stocks of the country’s oil companies down. Rosneft and Lukoil decreased 2.70% to 268.60 rubles and 3.83% to 2,378.50 rubles, respectively, and investors were not even impressed by Lukoil’s launch of industrial development at two Siberian fields, Igor Kovalyov, an analyst at InstaForex, said.

Grocery retailer Magnit lost 3.32% to 10,103 rubles, as its revenue increased only 15.1% to 80.468 billion rubles in January, the lowest growth figure for the company, Kostyukov said.

Power producer E.ON Russia fell 3.37% to 2.44 rubles. The company will not be able to launch a unit of the Berezovskaya GRES power plant until the end of 2016 after a recent fire, which will hurt the company’s financial performance in the year, Manzhos said.

Below are the MICEX’ five most active stocks on Tuesday:

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	-0.86	93.89	11.439
Lukoil	-3.83	2387.50	4.218
Gazprom	-0.60	132.70	4.141
Magnit	-3.32	10103.00	2.613
Rosneft	-2.70	268.60	2.195

(76.8614 rubles – U.S. $1)

End