Oil price fall, possible US-China trade war weigh on stocks

MOSCOW, Mar 28 (PRIME) – Lower oil prices and the possibility of a trade war between China and the U.S. resulted in contraction of Russian indices on Wednesday, analysts said.

The MOEX Russia Index fell 0.59% to 2,249.23 and the RTS decreased 1.38% to 1,226.80.

“The external background was moderately negative in the middle of the day. Oil prices lost about 0.4–0.6% over the data of the American Petroleum Institute that showed an unexpected increase in the reserves of so-called black gold last week. The U.S. Department of Energy’s report later on Wednesday is likely to bring the same unpleasant surprise,” Yelena Kozhukhova, an analyst at Veles Broker, said.

The Brent oil price fell 0.33% to U.S. $69.88 per barrel as of 6.00 p.m. Moscow time, according to the ICE exchange.

“Worries about the beginning of a trade war between China and the U.S. dominated the global stock market once again. Investors took the initiative of the administration of the U.S. president to limit Chinese investment into the IT sector badly, which led to a slump in shares of hi-tech companies,” Yevgeniya Abramovich, head of the currency risks research department at Swiss brokerage house Dukascopy Bank S.A., said.

Andrei Kochetkov, an analyst at Otkritie Broker, said that major sales in hi-tech companies of Europe, the U.S., and Asia also demonstrated lower tolerance to risk.

Vitaly Manzhos, a senior risk manager at investment company Nord Capital, said that oil major Lukoil grew 1.26% to 3,927 rubles after a recent flow of positive corporate news – a share buyback and a significant increase of dividends if the oil price stays above U.S. $50 per barrel, Manzhos said.

Shares of retailer Magnit lost 3.15% to 4,605 rubles, as investors still priced in weak financial results of the company, which only added fuel to the fire started by earlier news about the change of the largest shareholder, Manzhos said. Magnit’s 2017 net profit fell 34.68%.

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

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	-2.52	251.50	11.060
Gazprom	-0.23	140.47	2.997
Lukoil	+1.26	3927.00	2.775
Magnit	-3.15	4605.00	2.254
ALROSA	-2.46	89.44	1.422

(57.1747 rubles – U.S. $1)

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