Russian stocks can fall on unfavorable environ, new COVID cases

MOSCOW, Sep 24 (PRIME) -- Russian stocks are likely to contract on Thursday morning due to an unfavorable external background and due to a high number of new COVID-19 cases, analysts said.

“Today, the downward correction of the RTS Index may deepen at the beginning of the trade. As U.S. presidential elections come closer, a possibility that the Republicans and the Democrats will reach a compromise over a new fiscal package of economic stimulation measures becomes more and more uncertain," Olma’s senior analyst Anton Startsev said

"At the same time, the dynamics of COVID-19 spread makes some countries bring back restrictions, which has a negative impact on expectations of investors,” Startsev said.

U.S. stock indices shrank by 1.9–3.0% on Wednesday, and futures for the indices are in the red zone on Thursday. Asian floors are also falling considerably early in the day, Startsev said.

Analysts of investment company Finam said in a research note that positions of the MOEX Russia Index look unstable from the point of view of a technical analysis even despite a growth on Wednesday. “The short-term correctional trend is still here, and there is a risk that the index may test local lows around 2,855 today,” the research note read.

“The MOEX Russia Index has not yet priced in the (Wednesday) evening contraction in shares. The background is negative in the morning, as futures for U.S. indices and the oil price are losing half a percentage point, while industrial and precious metals are also falling significantly. We will open today with a decrease of the market’s ruble indicator,” Alor Broker’s senior analyst Alexei Antonov said.

Investors will pay close attention to the conference of Sberbank later in the day, and positive news coming from the conference may propel the bank’s shares above 232 rubles per security, paving the way to the strong resistance level of 242 rubles, Antonov said.

Finam’s analysts also said that investors would track releases of U.S. macro statistics during the day, including jobless claims and sales of new homes, and also look into the statements that U.S. Federal Reserve System’s Chairman Jerome Powell and U.S. Secretary of the Treasury Steven Mnuchin are to give to the U.S. Senate Committee on Banking.

(76.3545 rubles – U.S. $1)

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