Russian stocks fall on fears of Brexit impact on EU, US rate rise

MOSCOW, Jul 6 (PRIME) -- Russian stocks fell on Wednesday as investors fled risky assets fearing consequences of the U.K.’s Brexit vote for the E.U. and on the back of lower oil prices, analysts said.

The MICEX fell 0.86% to 1,879.42 and the RTS decreased 0.81% to 917.71.

Global investors continued selling risky assets, which predictably depressed the Russian stock market, Igor Kovalyov, an analyst at InstaForex, said.

“The key triggers of the negative dynamics are fears connected with the Brexit, which were exacerbated by yesterday’s statements by (Bank of England Governor) Mark Carney, as well as by the state of the Italian banking sector,” the expert said, adding that lower oil prices also depressed stocks.

Pavel Salas, general director for Russia and CIS at brokerage company eToro, said that Carney said that the E.U. economy has been under the pressure of Brexit and the situation is likely to worsen, while some media reported that a crash of E.U. major financial institutions is possible.

Vladimir Zotov, director for financial markets at Urals Bank for Reconstruction and Development (UBRD), said that risky assets were also depressed because John Williams, President and CEO of the Federal Reserve Bank of San Francisco, said that the influence of Brexit on the U.S. economy is exaggerated and the Federal Reserve System (Fed) may decide to increase the key rate if unemployment falls and inflation rises.

Forex Club analyst Irina Rogova said that the Russian stock market fall was sped up by lower U.S., European and Asian indices futures.

Vitaly Manzhos, a senior analyst at Bank Obrazovanie, said that top Russian lender Sberbank fell 1.89% to 129.36 rubles on the back of a weaker ruble.

Oil major Rosneft went down 2.7% to 320.5 rubles, private oil company Lukoil decreased 1.35% to 2,732 rubles and oil and gas producer Surgutneftegas fell 2.31% to 32.14 rubles due to lower oil prices, the expert said, adding that preferred stocks of Surgutneftegas, which offer high dividends, rose 0.78% to 39.85 rubles.

Metals companies were investors’ safe havens amid ruble depreciation and falling oil prices, according to Manzhos. Magnitogorsk Iron and Steel Works (MMK) increased 4.56% to 24.78 rubles, Novolipetsk Steel (NLMK) grew 2.46% to 84.14 rubles, and another steel producer Severstal rose 1.33% to 701 rubles.

Precious metals producer Polymetal increased 4.06% to 949 rubles on the back of higher prices for precious metals, Manzhos said.

Rogova said that car producer Sollers rose 4.18% to 449 rubles on the news that Russian car sales of Ford Sollers, the company’s joint venture with U.S. giant Ford, rose 56% on the year in January–June.

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

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	-1.89	129.36	9.124
Gazprom	-0.68	139.99	2.678
Lukoil	-1.35	2732.00	1.547
Surgutneftegas pref	+0.78	39.85	1.341
Rosneft	-2.70	320.50	1.265

(64.2676 rubles – U.S. $1)

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