Russian stocks fall on Monday in line with oil prices

MOSCOW, May 23 (PRIME) -- Russian stocks contracted on Monday following similar dynamics in the oil price while releases of negative foreign macroeconomic statistics did not bring any positive mood to the market, analysts said.

The MICEX fell 1.21% to 1,868.43 and the RTS decreased 1.52% to 879.55.

The Brent oil price fell 1.776% to U.S. $47.87 per barrel as of 6.56 p.m. Moscow time, according to the ICE exchange.

“The local market reacted to the negative external background with a significant fall. The most important factor in favor of Russian bears was a rather rapid intraday fall of the Brent oil futures, as the July futures slid to the $48 mark,” Vitaly Manzhos, a senior analyst at Bank Obrazovanie, said.

This indefinitely delays the possibility for the oil prices to test the $50 per barrel mark, which creates “a vulnerable situation for the Russian bulls,” Manzhos said.

The oil market depleted any drivers for its growth, and Canadian wildfires went down, which will soon lead to an increase in supply on the oil market, Vasily Oleinink, an expert at brokerage and investment company ITinvest, said.

“Developed economies continue to send negative signals, so the mood of investors is gradually worsening… Purchasing Managers’ Index (PMI) in the Eurozone’s manufacturing and services sectors did not meet forecasts, while the manufacturing PMI in the U.S. barely held above the 50 point mark, the lowest figure since September 2009,” Oleinik said.

Still, the oil price is the main driver for the Russian market. The news on Iran’s plans to raise its oil production by 200,000 barrels per day by August also had a negative impact on the Russian market, Vasily Tanurkov, deputy head of the stock market analysis department at investment company Veles Capital, said.

Shares of Uralkali grew 1.12% to 170.90 rubles still under influence of a decision of the company’s board of directors to approve a buyback of shares and global depositary receipts (GDRs) accounting for 4% of the capital, Manzhos said.

Preferred shares of oil pipeline monopoly Transneft lost 4.53% to 172,800 rubles. The shares continue to fall as investors and speculators are discontent with implementation of a recent government ruling for state companies to pay at least 50% of their net profit in dividends for 2015, Manzhos said.

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

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	-0.32	121.51	6.826
Gazprom	-1.63	144.31	3.931
Lukoil	-2.40	2647.00	2.386
Rosneft	-3.56	313.10	2.019
Magnit	-1.10	8975.00	1.108

(66.3775 rubles – U.S. $1)

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