Russian stocks contract as oil prices fall, investors wait for Fed

MOSCOW, Nov 3 (PRIME) -- The Russian stock market contracted on Wednesday as the fall of the oil prices triggered sales in the energy sector, while the Western investors took a pause waiting for a meeting of the U.S. Federal Reserve System (Fed) on the monetary policy, analysts said.

The MOEX Russia Index fell by 0.54% to 4,184.87 and the RTS decreased by 1.31% to 1,826.65.

“The MOEX Russia Index fell below 4,200 today, with almost all markets of the bourse showing negative dynamics. Investors continued closing positions prior to the November meeting of the Fed and due to the upcoming holiday in Russia. The falling oil prices exerted additional pressure on the market,” Alexei Golovinov, leading analyst at Promsvyazbank, said.

The shares of oil and gas companies were among the loss leaders as they followed the oil price, with Surgutneftegas decreasing by 1.42%, Rosneft by 1.79%, and Lukoil by 0.78%, Golovinov said.

Yevgeny Linchik, head of the stock management department at Sber Asset Management, said that the background was moderately negative for the Russian market. The Asian bourses closed lower, and the U.S. bourses took a pause waiting for the Federal Reserve System’s meeting. Toughening the monetary policy will be favorable for the financial sector, he said.

“Investors are becoming more and more concerned with the results of the Fed’s meeting. The baseline scenario forecasts announcement of a start of suspension of the U.S. $15 billion monthly monetary stimuli, but the reaction will be unpredictable even if the monetary policy is toughened by an expected margin. The process may become a trigger for a deep downward correction,” Dmitry Babin, stock market expert at BCS World of Investment, said.

Veles Capital’s analyst Yelena Kozhukhova said that shares of grocery retailer Lenta grew by 0.92% and children goods retailer Detsky Mir rose by 1.66% as the companies of the consumer sector acted as the defensive assets when the oil prices caused profit taking in the energy sector.

Golovinov also said that fertilizer producers Acron and PhosAgro lost 3% and 1.84%, respectively, after the government announced restrictions on exports of nitrogen and complex fertilizers.

Below are the MOEX Russia Index’ five most active stocks on Wednesday:

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Gazprom	-0.49	350.74	11.067
Sberbank	-0.57	368.58	9.662
Lukoil	-0.78	7158.00	3.747
Rosneft	-1.79	618.90	2.850
Norilsk Nickel	-0.81	21954.00	2.769

(71.4783 rubles – U.S. $1)

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