Russian stocks fall on negative environment, trade war woes

MOSCOW, Aug 9 (PRIME) -- The Russian stocks contracted on Friday together with the majority of foreign bourses as the market still wary of the U.S.–China trade war, while the Italian political crisis only adds fuel to the fire, analysts said.

The MOEX Russia Index fell 0.63% to 2,679.71 and the RTS decreased 1.10% to 1,289.47.

“On Friday, the Russian stock market experienced a downward correction because the European floors fell and the Asian floors closed mixed,” Sofya Kirsanova, portfolio manager at managing company Raiffeisen Capital, said.

Investor hopes for positive advancements in the trade war were dashed by the news that the U.S. is dragging its feet on providing U.S. companies with permits to export components and technologies to China’s Huawei. Concern that China may retaliate with a further weakening of the yuan also deepened. Escalation of trade wars threatens the Chinese economy, which is already slowing down, and the global economy as well, Kirsanova said.

“Trade mood on the European floors was pessimistic…It was under the pressure from political uncertainty in Italy and a possible need of extraordinary parliamentary elections in the country. Besides that, the U.K. published disappointing statistics showing a 0.2% quarter-on-quarter slowdown in the economy in April–June and a 0.1% monthly contraction of industrial output in June,” Yelena Kozhukhova, analyst at investment company Veles Capital, said.

Andrei Kochetkov, senior analyst at Otkritie Broker, said that Italy again was the cause of a headache for entire Europe. Matteo Salvini, Italian deputy prime minister and the leader of the Lega Nord party, said that a parliamentary coalition is malfunctioning and called for extraordinary elections. Shares of Italian banks were the first to suffer, and the yield on 10-year Italian bonds jumped by 26 basis points to almost 1.8%.

High gold prices again propelled shares of gold producers Polymetal and Polyus to top positions on the Russian market, with Polymetal gaining 0.75% to 835.40 rubles and Polyus rising 1.63% to 7,010 rubles, Kochetkov said.

Aluminum giant UC RUSAL fell 6.02% to 27.30 rubles as its net profit slumped 41% on the year to $558 million in January–June, and diamond mining giant ALROSA contracted 0.66% to 75 rubles as investors were displeased with falling sales in July, Kochetkov said.

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

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	-1.46	220.67	7.008
Gazprom	-0.54	229.96	4.275
Lukoil	+0.36	5287.00	4.032
Norilsk Nickel	-1.88	14800.00	2.696
ALROSA	-0.66	75.00	1.262

(65.1299 rubles – U.S. $1)

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