Russian stocks fall on concerns about volatile yuan

MOSCOW, Jul 3 (PRIME) -- Russian stocks fell on Monday on investor worries about volatility in China, while the U.S. investors decided to take profits before the Independence Day holiday, analysts said.

The MOEX Russia Index fell 0.76% to 2,301.65 and the RTS decreased 0.36% to 1,147.47.

“This morning investors again had a fit of panicking during the Asian trading session. The Chinese yuan was the major aggravator again,” Vasily Oleinik, an analyst at investment company Finam, said.

“The endless fall of the ‘precious shell’ reached a threshold of 6.7 yuan per U.S. dollar, but several hours later the head of the People’s Bank of China intervened verbally saying that the central bank controls the situation…The Chinese exchange indices fell 2% before the regulator intervened…but recovered fast.”

Vitaly Manzhos, a senior risk manager at investment company Nord Capital, said that trade at the Russian market was thin as the external background provided no drivers.

“The additional factor for the slowdown of trade activity in the second half of the day was a lack of foreigners. The U.S. is to celebrate the Independence Day tomorrow…so the mood of investors and speculators across the ocean will not be the one to support work. Many professional traders usually don’t open positions in thin pre-holiday trade,” Manzhos said.

Yelena Kozhukhova, an analyst at Veles Broker, said that Russian stocks were also undermined by the oil price. The Brent oil price remained flat on the day at U.S. $77.3 per barrel as of 6.03 p.m. Moscow time, according to the ICE exchange, as a result of a contraction after reaching the highest point for the day of $78.5 per barrel.

Andrei Kochetkov, an analyst at Otkritie Broker, said that a firming ruble was one of the factors that undermined the shares of exporting companies. Gas giant Gazprom lost 1.05%, while oil majors Lukoil and Rosneft fell 1.17% and 1.20%, respectively, and metals giant Norilsk Nickel decreased 0.52%.

But shares of steelmaker Severstal gained 0.40% as a German regulator approved creation of a joint venture between the company, state nanotechnology company Rusnano, and Spain’s Windar to build wind towers, Kochetkov said.

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

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	-1.16	218.45	8.427
Lukoil	-1.17	4325.00	2.391
Gazprom	-1.05	142.49	2.150
Norilsk Nickel	-0.52	11540.00	1.225
Tatneft	+0.12	678.00	1.094

(63.1394 rubles – U.S. $1)

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