Russian stocks can fall at opening on coronavirus worries

MOSCOW, Jan 27 (PRIME) -- The Russian stock market will likely open lower on Monday as the market anxiety about the spread of coronavirus depresses risky assets including oil and stocks on emerging markets, analysts said.

“A moderately negative background is formed before the start of a new week. The key risk of late, the spread of a new virus from China, is gaining momentum, though it might have seemed at the end of the last week that the situation was stabilizing slowly,” Investment company Solid analyst Vadim Kravchuk said.

Last weekend Chinese President Xi Jinping said the situation was tough with about 2,000 people contracting the infection.

Kravchuk also said that the oil price fell on the virus worries and head of MEA’s expectations of a market glut not only in the first, but also second quarter. The gold prices rise. Promsvyazbank chief analyst Bogdan Zvarich said that the emerging markets assets would also be under pressure from the flight from risk.

Sergei Drozdov, analyst at investment company Finam, said that Goldman Sachs expects oil demand to fall by 260,000 barrels per day in 2020 if the disease caused by the current coronavirus is comparable by scope with the 2003 pneumonia epidemic.

The Asian markets decreased in the morning with the Japanese market falling 2%. The U.S. stocks futures retrenched by 1%.

Drozdov put the support level for the MOEX Russia Index at 3,120 and 3,095. The resistance notch is 3,160. The local support level for the RTS index stands at 1,590, and resistance at 1,612.

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