Russian stocks can drop after global floors, wait for cbank meeting

MOSCOW, Jul 26 (PRIME) -- Russian stocks can slightly decrease at the opening on Friday following global markets amid no clear signals allowing them to form certain dynamics and in the expectation of a key rate decision of the central bank, analysts said.

“A downward correction of the RTS index following global stock indices is possible today at the start of trade…The second half of the day can be influenced by data on the U.S.’ gross domestic product (GDP) to be released at 3:30 p.m. Moscow time, Olma senior analyst Anton Startsev said.

Vadim Kravchuk, analyst at investment company Solid, said, “External background looks neutral prior to the opening of the Russian market today. Global indices are trading without single dynamics, with Chinese floors mostly rising in the expectation of a new round of trade talks, while the U.S. and European indices are under pressure following corporate reports and a meeting of the European Central Bank.”

A monetary policy meeting of Russia’s central bank is the most important event for domestic market today, Kravchuk also said. “We think that the key rate will be reduced by 25 basis points to 7.25%, this step looks most justified given current macroeconomic figures and dynamics of the market.”

Alor Broker analyst Alexei Antonov said that the Russian market grew on Thursday mostly thanks to a jump in Gazprom shares on the news about the sale of 2.9% in the company, but further dynamics look uncertain. “On the one hand, recent trading days show that the market has weakened and may go down to around 2,600 points, but on the other hand, there were some spike in activity of buyers this week.”

Startsev also said that speculative demand for shares of Gazprom can decrease because of the announcement of the price of share offering by the company’s subsidiaries at 200.5 rubles apiece, which implies a discount to the market of over 5%.

(63.1572 rubles – U.S. $1)

End