Russian stocks fall following US trade, dividend cutoffs

MOSCOW, Jul 14 (PRIME) -- The Russian stock market contracted on Wednesday in line with a fall on the Western bourses, while the dividend cutoffs in the shares of heavyweight national companies only added fuel to the fire, analysts said.

The MOEX Russia Index fell 1.14% to 3,832.85 and the RTS decreased 1.40% to 1,625.77.

“The MOEX Russia Index … fell as it followed the U.S. bourses. The reason for the sales came from the Tuesday release of the U.S. inflation statistics, which overshoot the forecasts significantly. The consumer price index stood at 0.9%, even though it was expected only to grow by 0.5%,” Alexander Osin, head of Freedom Finance’s department for trade operations on the Russian stock market, said.

“It strengthened the worries that the U.S. Federal Reserve System may toughen its monetary policy in the several coming quarters.”

The U.S. banking sector was under the pressure triggering Tuessday’s sales in Sberbank and Wednesday’s sales in VTB Bank, which lost 1.92% to 0.0473 rubles, he said.

“Dynamics of the national indices were under the impact of dividend cutoffs in some shares, and weakness of the commodity market. Sellers dominated the European floors, as they were pricing in a further increase in the U.S. inflation,” Andrei Kochetkov, leading analyst for global research at Otkritie Broker, said.

The oil price made dived on the news about a compromise between Saudi Arabia and the United Arab Emirates, but regained some ground to U.S. $76 per barrel, Kochetkov said.

He said that the financial sector was among the loss leaders with VTB setting the trend. VTB also suffered from a dividend cutoff. TCS Group fell by 3.65% to 6,289.40 rubles as investors were waiting for a decision of a British court on extradition of the group’s founder Oleg Tinkov to the U.S.

Veles Capital analyst Yelena Kozhukhova said that gas giant Gazprom shrank by 3.15% to 284.58 rubles due to a dividend cutoff.

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

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Gazprom	-3.15	284.58	14.569
Rosneft	-0.71	571.90	8.820
Lukoil	-0.95	6574.00	7.190
Sberbank	-0.32	302.02	6.884
Norilsk Nickel	+0.58	25812.00	6.158

(74.0589 rubles – U.S. $1)

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