Russian stocks fall on oil prices, ECB’s bond purchase increase

MOSCOW, May 19 (PRIME) -- Russian stocks corrected down on Tuesday as the Brent oil price decreased significantly and the U.S. dollar grew against the ruble and the euro after the European Central Bank (ECB) said it will increase bond purchases under its QE program in May and June, analysts said.

The MICEX fell 1.14% to 1,659.36 and RTS decreased 1.66% to 1,057.60.

“Tuesday’s key news became the ECB’s decision to increase bond purchases in May and June… European indices rose by almost 2% after that, but the euro sank over 1.5% against the U.S. dollar, and the latter’s growth immediately led to a correction in industrial and precious metals, and also hit the oil prices,” ITInvest’s analyst Vasily Oleinik said.

Macroeconomic statistics that was posted today also supported the euro’s decrease and the U.S. dollar’s growth, as German and E.U. economy confidence indices were weaker than expected, while U.S. new housing construction data turned to be unexpectedly high, Vasily Tanurkov, Veles Capital’s deputy CEO for stock market analysis, said.

“Despite that the ruble managed to hold at below 50 per U.S. dollar under falling oil prices, the U.S. dollar-denominated RTS index switched to a correction… The MICEX index also incurred certain losses from the Brent price fall as the share of energy exporting companies there is rather high,” Natalya Samoilova, head of Golden Hills-Capital’s analytic department, said.

The Brent oil price lost 2.474% to U.S. $64.76 per barrel as of 6.46 p.m. Moscow time, according to the ICE exchange’s data.

Russian stock and financial markets are now also under constant pressure from the risks of the U.S. Federal Reserve (Fed) rising its key rates. The next Fed’s decision on the monetary policy will be presented by mid-June, and if the rate is raised, it may prompt a rapid decrease in currencies of emerging countries and corrections at corresponding markets, Timur Nigmatullin, an analyst at Finam, said.

“Thus, the external background was negative for the Russian stock market today, as a decrease of crude prices exerted pressure on securities of oil and gas and metalls sectors,” Veles Capital’s Tanurkov said.

Shares of oil company Surgutneftegas, independent gas producer Novatek and metals companies Novolipetsk Steel (NLMK) and Norilsk Nickel lost 2.7%, 1.29%, 1.55% and 2.04%, respectively.

Metals and mining group Mechel fell 2.89% on the news that its main creditors Sberbank and VTB Bank submitted new debt claims against the company to the Moscow Arbitration Court.

VTB Bank gained 1.44%. The bank switched to an 18.3 billion ruble net loss in January–March after a 400 million ruble net profit in the same period a year ago, but the results were better than expected, and the bank’s Deputy CEO Herbert Moos even said the bank may improve its forecast for net loss in 2015.

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

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	-2.67	73.35	7.035
VTB	+1.44	0.07202	4.800
Gazprom	-1.35	149.85	3.767
Lukoil	-0.78	2530.00	2.322
Norilsk Nickel	-2.04	10039.00	1.968

(49.2175 rubles – U.S. $1)

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