Russian stocks can open slightly lower on shaky oil price rise

MOSCOW, May 3 (PRIME) -- The Russian stock market is likely to open with a downward gap on Wednesday because a recent oil price rebound is seen as unstable while the results of a phone conversation between the Russian and U.S. presidents and a lawsuit against multi-industry holding Sistema can trigger sales, analysts said.

“The ultimate influence of key factors that have a significant impact on the Russian financial market is close to neutral today at the start of the day in our estimates,” Oleg Shagov, head of investment company Solid’s research department, said.

Oil prices are rebounding after Tuesday’s losses as the U.S. reserves are falling according to the American Petroleum Institute (API). At the same time, bids of hedge funds for a decrease in oil prices have reached a six-months high, he said.

Andrei Vernikov, deputy CEO for investment research at Zerich Capital Management, said that the Russian market is unlikely to be supported by oil prices and the statements after a phone conversation between Russian President Vladimir Putin and his U.S. counterpart Donald Trump.

The Russian indices can erase the Tuesday’s gains on Wednesday or Thursday, he said.

The market can also painfully react to an about 100 billion ruble lawsuit against Sistema by oil major Rosneft, the current owner of Sistema’s former oil affiliate Bashneft. Rosneft officials blame Sistema for Bashneft asset manipulation, which “actualizes the business transparency issue,” Vernikov said.

“Would investors want to hold shares of non-transparent Russian oil companies in their portfolios or will start to get rid of them as soon as a chance offers?” Vernikov said.

The U.S. Federal Reserve System will hold a meeting on Wednesday to discuss the monetary policy; ADP will issue private sector jobs report, the euro zone will release gross domestic product (GDP) data for January–March and Germany will publish unemployment figures, which is the most anticipated data, Sergei Kozlovsky, head of the analytical department of brokerage company Grand Capital, said.

The euro zone will publish the producers’ price index, the U.S. will release the service sector business activity and the employment index, oil and oil product reserves, he said.

(56.9518 rubles – U.S. $1)

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