Russia stocks to fall on lower foreign trading, oil price decrease

MOSCOW, Nov 8 (PRIME) -- Russian stocks are likely to open lower on Wednesday following falling foreign trading floors and correction in oil prices after recent record-highs, analysts said.

“The ultimate influence of the key external factors that have a significant impact on the behavior of the Russian stock market is moderately negative at the beginning of the day, according to our estimates. The prices of January futures for Brent oil are falling on forecasts of a higher shale oil production in the U.S.,” Oleg Shagov, head of investment company Solid’s research department, said.

The U.S. stock index futures are in the red zone in the morning, the Asian floors show no common dynamics, and the premarket data for Europe signals a slight contraction of leading European indices at the beginning of the day, Shagov said.

“We expect the Russian market to open in a range of 2,150 of the MICEX index and suppose that the indicator may try to resume its upward movement later in the day after a maximum one-day growth for the past two and a half years,” Shagov said referring to Tuesday’s trading. “Positive corporate news and improvement of the external background will provide support.”

Anton Startsev, a leading analyst at investment company Olma, also said that a downward correction of the RTS index is possible at the beginning of the day.

“The mood of stock markets became less optimistic after the news that the U.S. Republican Party has delayed the release of its decision on the tax reform plan and that introduction of a new corporate profit tax of 20% to replace 35% may be delayed for a year,” Startsev said.

Shagov also said that local investors will track the release of Sberbank’s January–October financial results calculated under Russian Accounting Standards, as well as dividend recommendations of the boards of directors of Magnitogorsk Iron and Steel Works (MMK) and of power producer Unipro.

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