Russian stocks fall on concerns over Fed’s key rate, oil prices

MOSCOW, Sep 12 (PRIME) -- Russian stocks fell on Monday as investors priced in concerns of the world’s markets regarding a possible increase of the key rate of the U.S. Federal Reserve System (Fed), while weak dynamics of oil prices were unable to support the market, analysts said.

The MICEX fell 0.41% to 2,019.90 and the RTS decreased 0.41% to 983.78.

“Friday’s comment made by the Boston Fed President Eric Rosengren was the main reason for sales at the world’s trade floors. The comment signaled a threat of low rates overheating the economy, and prompted a wave of purchases of the U.S. dollar. The interest in the U.S. dollar was also supported by the hawkish rhetoric of Dallas Fed President Robert Kaplan,” Andrei Dirgin, head of the analytical department at Alfa-Forex, said.

These statements increased the possibility of the Fed raising its key rate this month, which slashes the interest in risky assets at the world’s market. If this factor remains, the MICEX index may fall to 2,000 points in the coming days, Dirgin said.

“From the beginning of the day, Russian stocks were pricing in the contraction of oil prices. Brent was under pressure from Friday’s report on drilling rigs from Baker Hughes. The report reflected growth, which may end with an increase of demand, and showed that shale oil companies have adapted to the current level of prices,” Irina Rogova, an analyst at Forex Club group of companies, said.

But by the evening, oil prices switched to growth, which allowed Russian stocks to regain some of their Monday losses, Rogova added.

The Brent oil price increased 1.133% to U.S. $48.56 per barrel as of 6.26 p.m. Moscow time, according to the ICE exchange.

Shares of Russian retailer Magnit lost 1.63% to 10,372 rubles as the company’s revenue grew 13.83% on the year in August, lagging behind the January–August growth figure of 14.31%, Vitaly Manzhos, a senior analyst at Bank Obrazovanie, said.

Fertilizer producer Uralkali was weaker than the market and fell 2.55% to 185.15 rubles due to a statement that its shares will be excluded from the MVIS Russia Index, Manzhos said.

Power holding Inter RAO rose 2.54% to 3.245 rubles as its shares will be included in the MVIS Russia Index at the end of this trade week, Manzhos said.

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

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	-0.11	151.43	8.435
Gazprom	+0.28	138.93	3.615
Lukoil	-0.49	3045.50	2.202
VTB	-2.28	0.075	2.072
ALROSA	-2.01	80.78	1.367

(64.1617 rubles – U.S. $1)

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