Russian stocks can fall on oil price slide, Morgan Stanley report

MOSCOW, Jun 3 (PRIME) -- The Russian stock market is to correct after recent gains at the opening, on the back of an oil price decline and deterioration of Morgan Stanley’s outlook for the global economy, analysts said.

“A slump of oil quotations at the start of the week and a general negative external background force us to wait for a correction of the MOEX Russia Index to a 2,620–2,640 zone today. The closeness of the dividend season has a moderating effect on fulfillment of the negative scenario,” Promsvyazbank analyst Mikhail Poddubsky said.

Vitaly Manzhos, a senior risk manager at investment company Algo Capital, said that the external background at the start of the Russian trading session is negative as the U.S. stock market futures fell by 0.6–0.9%, Brent got cheaper by 1.3%, the gold futures added 0.5%, the Shanghai Composite decreased 0.2% and Japan’s Nikkei sagged by 1.3%.

Poddubsky said that escalation of the U.S. trade conflict has made the leading financial institutions worsen their outlooks for the global economy. Morgan Stanley published a report indicating risks of a forthcoming global recession, if the U.S. restricts Chinese imports.

According to Manzhos, the MOEX Russia Index is to open with a 0.5% downward gap, close to 2,650. The levels of 2,640 and 2,630 will act as the closest support and of 2,670–2,680 resistance. The index will continue to follow the external situation worsening and may reach 2,640 and below.

Olma senior analyst Anton Startsev said that the RTS Index will also be under pressure.

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