Russian stock seen opening flat on lack of drivers

MOSCOW, Apr 25 (PRIME) – The Russian stocks are likely to open neutrally on Thursday as the external background provides no drivers for any serious changes, while the market’s potential for a downward correction is limited, analysts said.

“From the point of view of technical analysis, the market may find support in the range of 1,240–1,250 of the RTS index. The external background gives no reason for strong movements on the market,” investment company Olma’s senior analyst Anton Startsev said.

The recent increase of the U.S. dollar against the basket of currencies has likely made investors to take a more conservative approach to the emerging markets, while an unexpected contraction of South Korea’s gross domestic product and worsening of economic forecasts by the Japanese central bank added increased uncertainty. But the international stock markets are relatively stable, and corporate reports outperform expectations in general, Startsev said.

“The Russian market ended yesterday with a 0.3% contraction of the MOEX Russia Index. Given the currently high oil prices and the upcoming dividend season, we think that the potential of a downward correctional movement is limited. Our baseline scenario says the MOEX Russia Index will remain in a range of 2,550–2,600 in several coming days and then rising to the upper threshold of the range,” Promsvyazbank senior analyst Mikhail Poddubsky said.

Vitaly Manzhos, senior risk manager at investment company Algo Capital, said that the external background for the Russian stock market looked slightly positive early in the day as the U.S. stock index futures gained about 0.3%, the Brent oil price rose 0.2%, Japan’s Nikkei225 grew 0.5%, and Hong Kong’s Hang Seng fell 0.1%.

“We expect the MOEX Russia to open with an insignificant growth in the range of 0.1–0.3% close to 2,585. The levels of 2,570 and 2,560 will remain as the closest support, while 2,600 and 2,610 will stay as a noticeable resistance. After a slightly positive start of the day, the MOEX Russia Index is likely to switch to consolidation due to a restrained improvement in the morning background,” Manzhos said.

Later in the day, investors will track oil prices, while the release of the U.S. weekly jobless claims and March durable orders, he said.

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