Russian stocks fall on OPEC+ deal, coronavirus uncertainty

MOSCOW, Mar 5 (PRIME) -- The Russian stock market declined on Thursday on the back of an oil price slide triggered by uncertainty caused by Russia’s unwillingness to reduce oil production and by the uncertainty over the coronavirus effect on markets, analysts said.

The MOEX Russia Index fell 0.40% to 2,816.70, and the RTS index decreased 1.81% to 1,323.82.

“Market growth is so far limited by a local oil decrease. The market is nervous about statements about the OPEC plus agreement. The cartel is so far unable to agree on a record production decrease by 1 million barrels. Brent fell to U.S. $50.6, which, we think is unfairly low,” Freedom Finance analysts said.

The OPEC members agreed to cut the production by 1 million barrels per day additionally in April–June. Saudi Arabia suggested the OPEC and non-OPEC sides of the deal reduce production by a combined amount of 1.5 million barrels per day to combat the negative effect of the coronavirus, but Russia’s position remained unclear.

Freedom Finance said that the foreign markets trend is positive as the U.S. closed 4.5% higher on Wednesday, while Europe rose 3.5%.

Otkritie Broker’s senior analyst Andrei Kochetkov said that many market participants believed that the situation with the coronavirus was more serious that it seemed before because of an eagerness of global financial organizations to introduce aggressive support measures. “However, it can turn critical if the market slide continues and triggers problems in the European and U.S. banks.”

Kochetkov said that Russia’s Federal Grid Company of Unified Energy Systems (FGC UES) was under pressure, falling 2.14% after the company reported a 6.7% net profit fall in 2019 under International Financial Reporting Standards.

According to Freedom Finance, Detsky Mir grew 2.18% after announcing extension of the store chain.

Aeroflot decreased 3.30% after reports about mining of several interregional jets, all of them were denied but led to flight delays.

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

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	-1.25	232.33	13.360
Gazprom	-1	198	13.174
Lukoil	-0.78	5862.5	9.036
Norilsk Nickel	+0.12	20780	5.333
Rosneft	-1.29	410.6	3.554

(66.0784 – U.S. $1)

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