Russian stocks can fall on oil price decrease, new pandemic fears
MOSCOW, Jun 17 (PRIME) -- The Russian stock market will likely edge down at opening on Wednesday on fears that the U.S. economy is unprepared for a second wave of pandemic and an oil price fall, analysts said.
"The external background before the start of trade in Russia is negative. The Asian indices are mixed on fears of a second wave of COVID-19 and negative geopolitical events," Otkritie Broker’s senior analyst Andrei Kochetkov said.
According to Sergei Drozdov, analyst at investment company Finam, the markets returned to a positive mood on Tuesday on the back of surprisingly strong U.S economic data. But growth gave way to mixed dynamics on Wednesday, according to Alor Broker’s senior analyst Alexei Antonov, after Chairman of the U.S. Federal Reserve System Jerome Powell said that the U.S. economy is unprepared for a likely second wave of the pandemic.
Brent surged by 2.37% to U.S. $40.76 on Tuesday, as Drozdov said, after the International Energy Agency (IEA) forecasted oil demand to rise by a record of 5.7 million barrels per day in 2021, while according to a report by Bloomberg, exports from Saudi Arabia and the U.S. can fall to a 35-year low in the second half of June and July. But optimism was expected to fade even then as the American Petroleum Institute (API) reported a weekly reserve rise.
On Wednesday, oil retreated on fears of a slow demand recovery, Kochetkov said. Brent fell by 1.56% to $37.78.
Drozdov put the MOEX Russia Index support level at 2,720 and 2,690, resistance at 2,780-2,800. The RTS index support level is 1,238 and 1,216 and resistance at 1,264.
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