Russian stocks can fall on fears of deepening US–China conflict

MOSCOW, May 6 (PRIME) -- The Russian stock market will likely fall at opening on Monday as investors are surprised by the possibility of continuation of the China–U.S. trade war, analysts said.

“We expect opening of the Moscow Exchange Index with a strong decrease of up to 1% at 2,555–2,560. The levels of 2,550 and 2,540 will act as the closest support and the levels of 2,580–2,590 will remain the important resistance,” Vitaly Manzhos, senior risk manager at investment company Algo Capital, said.

“The MOEX Russia Index will reflect a strong deterioration of the external background in the morning in the first minutes of trade due to substantiated fears of deterioration of the trade war between the U.S. and China,” Manzhos said.

Senior Analyst of Promsvyazbank Mikhail Poddubsky said that after last week’s negotiations the two states talked about productivity of discussion but on May 5, President Donald Trump announced a U.S. $200 billion increase of trade duties for Chinese food to 25% from 10% and mentioned a possible extension of 25% duties on all Chinese goods.

Manzhos said that prior to the trading session in Russia the U.S. stock market futures lost 2% on average, the Brent deals fell 2.2%, the gold futures added less than 0.2%. The Shanghai Composite index sagged by more than 3.3%, which, according to Manzhos, provides a negative background for the start of the session in Russia.

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