Russian stocks can fall as oil prices fail to recover to $40

MOSCOW, Mar 11 (PRIME) -- The Russian stock market will likely edge down at opening on Wednesday as oil prices failed to recover to U.S. $40 per barrel after a slide earlier this week, analysts said.

“Demand for shares will likely remain under pressure at the beginning of trade today due to uncertainty concerning the global economy,” investment company Olma’s senior analyst Anton Startsev said.

The oil prices rose by 13.42% to $37.82 on Tuesday in the evening. Sergei Drozdov, analyst at investment company Finam, said, “The positive dynamics was mainly caused by the closing of short positions after a strong decline the day before, the biggest since the Persian Gulf War in 1991. The market players will need some more time now to figure out the situation and the pricing prospects for black gold.”

On Wednesday in the morning, oil grew to $40 but later declined again.

The U.S. stock market recovered on Tuesday. According to Drozdov, this happened after the statements by the presidential administration that aid will be provided to the industries, which suffered most from the coronavirus. Besides, President Donald Trump asked the Congress to introduce fiscal stimuli including a decrease of the payroll tax.

Startsev said that the volatility indices remained high.

Alor Broker analyst Alexei Antonov said that the oil and gas sector, and banks will weigh the Russian market down while metals companies, primarily ferrous metals producers, might grow thanks to a weak ruble, high dividends and stable metal prices.

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