Oil price rebound to help Russian stocks rise at opening

MOSCOW, Oct 27 (PRIME) -- Russian stocks are likely to open higher on Friday supported by an oil price rebound, analysts said.

“We expect the Russian stock market to open in a 2,050–2,055 range of the MICEX index and suppose that the stock indicator will try to win back some losses after six consecutive trading sessions of contraction,” Oleg Shagov, head of investment company Solid’s research department, said.

The background for the Russian stock market is moderately positive early in the day with the U.S. stock index futures edging up and the Asian floors showing no common dynamics. But the major factor for the Russian market is the oil price, which has grown above U.S. $59 thanks to Saudi Arabia’s support of prolongation of the OPEC+ oil output reduction deal, Shagov said.

As of 9.05 a.m. Moscow time, the Brent oil price grew 0.051% to U.S. $59.33 per barrel, according to the ICE exchange.

“Higher world oil prices after the statement of Saudi Arabia’s prince is a support factor for the Russian market at the beginning of trade. Still, the RTS index’s rise may be restrained by the growth of the U.S. dollar after the U.S. House of Representatives approved a draft budget allowing the Senate to approve a U.S. tax reform with a simple majority of votes,” Anton Startsev, a leading analyst at investment company Olma, said.

Vitaly Manzhos, a senior risk manager at investment company Nord Capital, also said that the Russian market may open with an increase of about 0.2–0.4% of the MICEX index in a 2,050–2,055 range. “The levels of 2,040 and 2,030 remain the closest support, while the marks of 2,060 and 2,070 will act as resistance,” he said.

“After a positive start of trade, the MICEX is likely to try to climb to 2,060. This will be supported by a significant improvement of the mood of the oil market.”

Startsev said that local investors will track the central bank’s decision on its monetary policy. The market expects the regulator to cut the key rate by 0.25 percentage points to 8.25%, he said.

Manzhos also said that trade may be affected by a July–September estimate of the U.S. gross domestic product, and by the release of the Michigan Consumer Sentiment Index.

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