Russian stocks fall on escalation of geopolitical tensions

MOSCOW, Jul 22 (PRIME) -- The Russian stocks contracted on Monday in spite of a favorable external background as geopolitical tensions around the country grew as discussions of alleged interference of Moscow into the U.S. elections, and concerns over alleged involvement of Russians into the U.K.–Iran tanker incident resumed, analysts said.

The MOEX Russia Index fell 0.60% to 2,684.25 and the RTS decreased 0.70% to 1,341.17.

“The Russian market started the trading week with an attempt to grow, but the MOEX Russia Index soon switched into the red zone…Taking into account the relatively positive background…the movement is explained by two major reasons: a seasonal peak of contraction in trade activity, and a temporary resurgence of geopolitical tensions around Russia,” Sergei Deineka, financial analyst at BCS Premier, said.

The two prime geopolitical cases today were the U.S. Congress continuing discussions of alleged interference of Russia in the 2016 elections, and to reports of Western media that Russians took part in the Iranian military capturing a U.K. tanker, Deineka said.

Dmitry Babin, stock market expert at BCS Broker, also said that the Russian market reacted to the unfavorable geopolitical news instead of positive factors like the growing oil price.

The majority of media that reported Russia’s involvement in the tanker incident were tabloids, and their materials have no ground to stand on, and Special Counsel Robert Mueller’s report over Russia’s meddling with the U.S. elections has shown no demonstrable evidence of Moscow’s actions earlier. Still, aggravation of the anti-Russian rhetoric triggers sales on the overheated Russian market, which has not yet fully priced in the geopolitical risks, Babin said.

Andrei Kochetkov, senior analyst at Otkritie Broker, said that agricultural holding Rusagro outperformed the market with the global depositary receipts (GDRs) rising 0.43% to 746.80 rubles as its combined revenue grew by 135% on the year in January–June.

With the dividend period over, many shares were left without trade ideas, but gas giant Gazprom, which grew 0.52% to 217.12 rubles, was supported by the parliamentary elections in Ukraine, where radicals and hardliners were in minority, Kochetkov said.

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

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	-1.07	230.35	8.783
Gazprom	+0.52	217.12	7.328
Surgutneftegas prefs	-4.00	31.20	2.861
VTB	+2.37	0.043405	2.275
Lukoil	-0.67	5165.50	1.871

(62.8666 rubles – U.S. $1)

End