Russian stocks can fall as investors fear key rate increase

MOSCOW, Sep 14 (PRIME) -- The Russian stock market is likely to continue falling on Thursday in the morning, as investors are concerned with a possibility of the central bank raising its key rate at the Friday meeting, analysts said.

“The MOEX Russia Index contracted by 1% on Wednesday to 3.148. We expect the negative tendencies to continue in the Russian shares at the start of the trade today. Inventors may continue cutting the shares in their portfolios because of a risk of the central bank raising the key rate, which would lead to a further correction on the market,” Bogdan Zvarich, senior analyst at financial marketplace Banki.ru, said.

A possible strengthening of the ruble’s exchange rate may become an additional negative factor for the shares of exporters. As a result, the MOEX Russia Index may make another step down toward the support level of 3,075, Zvarich said.

At the same time, the external background for the national market is positive. The leading Asian bourses are gaining up to 1.5%, and the futures for the U.S. indices are rising by 0.3%, because the Wednesday inflation statistics in the U.S. was close to the consensus forecast. The Brent oil price is growing by 0.5% to U.S. $92.4 per barrel, he said.

Head of Alor Broker’s investment consulting department Alexei Antonov said that the Russian market fell on Wednesday in spite of a new deep decrease of the ruble’s rate and high prices for oil. At the same time, investors continued buying bonds actively on the Moscow Exchange.

“Thus, it is possible that investment capital has started flowing from the stocks to the debt market,” he said.

“We still recommend that investors make only new speculative purchases, because the market will remain volatile in several coming days. Taking into account the new fall of the ruble and a weak slowdown in the growth of lending, the probability of the Central Bank of Russia raising the key rate is growing,” Antonov said.

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