Russian stocks fall after foreign floors on further Brent weakening

MOSCOW, Jul 24 (PRIME) --The Russian stock market fell on Friday following trends of Asian and European floors driven by weak local economic statistics and on ongoing decrease in oil prices with Brent falling to about U.S. $54.5 per barrel by the end of the domestic trading session amid commodity markets volatility, analysts said.

The MICEX fell 1.27% to 1,595.61 and the RTS decreased 2.87% to 859.12.

“Almost all world trading floors end the week with a pessimistic mood. The volatility on the commodity market is the reason that encouraged sellers. The market sees risks of oil supply rising if a deal with Iran is concluded, but oil consumption raises concerns as well. The Chinese economy still slows down, which is shown by the latest industrial PMI data… As a result, not only oil prices experienced some pressure, but other commodity goods, like commercial metals and ore,” Andrei Shenk, analyst at Alfa-Capital, said.

Purchasing Managers' Indexes (PMIs) in China, Germany and the entire euro zone were lower than expected, which pushed Asian and European stock floors to the red zone, Veles Capital said in a research note. The U.S.’ industrial PMI data was more optimistic and this supported the U.S. dollar but consequently negatively affected the ruble and commodity prices, Veles Capital’s analysts said.

Commodity prices falls hit developing economies, including Russia, in the first place, and capital outflow from emerging markets is likely to continue until prices on commodity goods stabilize, Shenk said, adding that a summer holiday season and low activity of investors lead to significant dynamics of stock indices even with low volumes of sales.

The oil market is also facing some uncertainty over its future state because OPEC countries’ oil output has been exceeding OPEC’s own quotas for a while, Andrei Dirgin, director of the analytical department at Alfa-Forex, said.

The dollar-denominated RTS reached its record low for four months, experiencing a technical correction on the back of the ruble fall to 58.5 against the dollar by the end of the trading session, according to Vitaly Manzhos, senior analyst at Bank Obrazovanie.

Uncut diamond mining giant ALROSA fell 4.85% on the back of unfavorable conditions on the diamond market, Manzhos said.

Metals exporters Severstal and Novolipetsk Steel (NLMK) gained 2.35% and 2.03%, respectively, because of weakening of the ruble, Veles Capital’s analysts said.

Power holding Inter RAO rose 0.39% as the company published strong financial results for January–June with a 78% net profit increase under Russian Accounting Standards, Manzhos said.

Below are the MICEX’ five most active stocks on Friday:

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	-3.09	70.45	9.579
Gazprom	-1.42	136.41	4.196
VTB	-1.03	9025.00	2.159
Lukoil	+0.26	2468.90	1.966
Norilsk Nickel	-1.17	0.07190	1.187

(57.3578 rubles – U.S. $1)

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