Russian stocks fall on oil output woes, disillusioned with Trump

MOSCOW, Jan 13 (PRIME) -- Stocks contracted on Friday as U.S. President-elect Donald Trump ‘s Wednesday speech deprived investors of their illusions about his to Russia and on falling oil prices, analysts said.

The MICEX fell 0.76% to 2,195.19 and the RTS decreased 1.45% to 1,158.19.

“During the day, the Russian market was in the red zone on high trading volumes. Hopes placed with the new U.S. administration are gradually dissolving, and it looks like there is no possibility for a further growth of oil prices. The strong ruble also hurts incomes of exporters calling for market revaluation of current prices of their shares,” Andrei Kochetkov, an analyst at Otkritie Broker, said.

The Brent oil price slid 0.143% to U.S. $55.93 per barrel as of 6.00 p.m. Moscow time, but during the day the price showed an about 1.2% decrease close to the $55.40 per barrel level.

Timur Nigmatullin, an analyst at investment company Finam, attributed the fall to an OPEC statement, which said that even a 50% cut is acceptable despite an agreement to cut 80%.

“Oil prices grew by more than 20% after the OPEC agreement even without any tangible results. The fact that the output reduction will be seen only in reports for January, and its impact on supply at the market will be seen even later. That is why some investors decided to go slow and wait for new incentives,” Sofya Kirsanova, an analyst at managing company Reiffeisen Capital, said.

Nigatullin also said that the ruble-denominated shares are under pressure from expectations of a quick toughening of the U.S. Federal Reserve System’s monetary policy later this year and uncertainty over Trump’s economic and geopolitical decisions.

Kochetkov said that oil and gas pipe maker TMK outperformed the market and grew 0.82% to 79.45 rubles as the company’s pipe sales increased 7.4% on the quarter to 882,000 tonnes, and the company expects the sales to grow further in 2017.

Shares of independent gas producer Novatek fell 1.66% to 739.90 rubles as the company’s gas production fell 2.7% on the year to 66.1 billion cubic meters in 2016.

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

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	-2.00	164.90	14.305
Gazprom	+0.45	157.95	3.660
Norilsk Nickel	-2.38	9756.00	3.398
Magnit	-2.43	9640.00	2.253
Lukoil	-0.30	3290.00	2.073

(59.4978 rubles – U.S. $1)

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