Russian stocks can fall on China downgrade, N Korea threats

MOSCOW, Sep 22 (PRIME) -- The Russian stock market is expected to slightly decrease at the start of the trading session on Friday on the back of bearish moods in Asia after a downgrade of China by rating agency Standard & Poor’s and threats by North Korea, but stable oil prices can cushion the negative dynamics, analysts said.

“A downgrade of China by international rating agency Standard & Poor’s (from AA- to A+ with a stable outlook) and an increase of tensions in the news background around North Korea (North Korea representatives mentioned a possibility to test a hydrogen bomb in the Pacific Ocean) affected the situation on the Asian stock trading floors negatively and can negatively affect the activity of investors on developing markets in general,” Olma senior analyst Anton Startsev said.

Oleg Shagov, head of investment company Solid’s research department, said that the external background for the Russian trading session start is close to neutral because oil prices are fluctuating close to the U.S. $56.4 per barrel level.

U.S. stock market futures are falling slightly, the European premarket also signals a small decrease during the trading session start.

Shagov said that these factors will make the MICEX index open at about 2,060 and to remain close to that level.

Startsev said that Russian investors will pay attention to a meeting of the ministers of states participating in the OPEC plus nonmember agreement on oil output reduction in Vienna later on Friday.

Shagov said that rating agency Fitch is expected to decide on Russia’s sovereign credit rating on Friday, which can affect investors’ moods and quotations of some securities.

End