Russian stocks can fall on oil price decrease, Italy conflict

MOSCOW, May 30 (PRIME) -- The Russian stock market will likely open with a downward gap on Wednesday due to decrease of oil prices, of foreign stock market indices and political issues in Italy, analysts said.

“The external background remains unfavorable: growth of volatility has started on foreign trading floors, the spread between the emerging and developed markets bonds (Emerging Markets Bond Index Global Spread) has grown to the peak level since 2016, the situation in the segment of Italian state debt remains unstable (the yield on two-year sovereign securities of Italy rose to 2.7% annually in three days from 0.5% annually),” Anton Startsev, a senior analyst at investment company Olma, said.

Promsvyazbank analyst Mikhail Poddubsky said that the Italian parliament will barely approve Carlo Cottarelli, a candidate for the prime minister post by the president, and in this case Italy will face early elections in September.

Vitaly Manzhos, a senior risk manager at investment company Nord Capital, said that an up to 0.2% decline of the U.S. stock market futures, a 0.5% decrease of the Brent oil price and a drop of the Japan’s Nikkei225 and Hong Kong’s Hang Seng indices with unchanged gold prices are making for a moderately negative external background for the opening of the Russian trading session.

As a result, the MOEX Russia Index can open with a 0.5% downward gap, in a range between 2,285 and 2,290. The levels of 2,280 and 2,270 will be the support ones and of 2,300 and 2,310 the resistance ones, Manzhos said.

Startsev said that the RTS will likely deepen its downward correction.   

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