Russian stocks are likely to open flat on lack of drivers

MOSCOW, Aug 24 (PRIME) – The Russian stocks are likely to open neutrally on Friday and trading will be lackluster as the external background provided no strong drivers for the market, analysts said.

“The external background is unlikely to fuel purchases on Friday, as the Asian stock indices fall due to the lack of a breakthrough in trade negotiations between China and the U.S.,” Anastasia Sosnova, an analyst at investment company Freedom Finance, said.

Investors will focus on a speech by U.S. Federal Reserve System’s Chairman Jerome Powell, in which he is supposed to soften the monetary policy rhetoric following recent criticism by U.S. President Donald Trump. But expectations of two more rate increases by the Fed this year remain, pressuring the emerging markets, Sosnova said.

“The Russian stock market will likely close flat today due to the lack of drivers. Expectations for the MOEX Russia Index are at 2,250–2,280,” she said.

Anton Startsev, a senior analyst at investment company Olma, said that the background prior to the start of trade in Russia is neutral, but sanctions will restrain activity of buyers on the market, as the U.S. State Department confirmed introduction of a new round of anti-Russian sanctions on August 27.

“The downward correction of the RTS index may worsen today, as technical analysis points to a higher probability that the index will leave the consolidation period and start a noticeable decrease as it had closed below 1,050,” Startsev said.

But Vitaly Manzhos, a senior risk manager at investment company Algo Capital, said that the U.S. stock index futures grew by 0.3% in the morning, and the Brent oil price gained 0.6%, meaning the Russian market may price in the improvement early in the day.

“We expect the MOEX Russia Index to open with a moderate increase of 0.2–0.4% in the range of 2,265–2,270. The levels of 2,260 and 2,250 will act as support, while 2,290 and 2,300 will become resistance,” Manzhos said.

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