Russian stocks fall as geopolitical tensions develop

MOSCOW, Aug 17 (PRIME) -- Russian stocks fell on Friday as confrontation between the U.S. and China and Turkey built up, and investors were waiting for details of new U.S. sanctions against Moscow, analysts said.

The MOEX Russia Index fell 0.26% to 2,255.12 and the RTS decreased 1.29% to 1,052.74.

“The external situation has worsened again. The U.S. administration warned China that it should take U.S. demands seriously, and Turkey plans to respond to the U.S. pressure. Europe is again concerned with the health of Italian banks,” Andrei Kochetkov, a senior analyst at Otkritie Broker, said.

“It may seem that this is far from the realities of the Russian market, but slowing economies of China and Turkey has a direct impact on our national exports, and new problems in the European banking sector may have negative consequences for Russian exporters or for inflow of investment in Russian shares,” Kochetkov said.

Vitaly Manzhos, a senior risk manager at investment company Algo Capital, said that local bulls shrugged off improvements on the oil market.

“It looks like everyone delayed active purchases in Russian shares to the middle of next week, when details on the new package of U.S. sanctions against Russia are to emerge,” Manzhos said.

Vasily Oleinik, an expert at investment company Finam, said that investors were overwhelmed with the amount of risks in the world, including a global capital flight from risky assets and currencies due to falling liquidity in the world’s financial system.

“A significant outflow of capital was registered in South Africa, Brazil, Mexica, and India in addition to Turkey and Argentina, where a new default is looming,” Oleinik said.

Kochetkov also said that shares of metals companies were supported by an overwhelmingly negative reaction to presidential aide Andrei Belousov’s idea on additional tax coming from the Russian Union of Industrialists and Entrepreneurs. Steelmakers Severstal, Magnitogorsk Iron and Steel Works (MMK), and Novolipetsk Steel (NLMK) grew 0.22%, 0.78%, and 1.16%, respectively.

Shares of mobile operators were in the red as the Digital Development Ministry wanted to oblige them to use more secure SIM cards, an idea which may cost over 83 billion rubles. MTS lost 0.06%, Kochetkov said.

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

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	-1.07	189.55	8.610
Gazprom	+0.09	141.01	2.123
Lukoil	-0.48	4375.00	1.904
Norilsk Nickel	-0.73	10821.00	1.662
ALROSA	-0.22	93.89	1.256

(66.8932 rubles – U.S. $1)

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