Russian stocks fall on threat of new sanctions, lower ruble, oil

MOSCOW, Jan 26 (PRIME) -- Russian stocks was pummeled on Monday by falling oil and the national currency, the escalation of the Ukrainian conflict, results of the Greek parliamentary polls and because of remaining fears that Standard & Poor’s will cut the country’s rating, analysts said.

The MICEX fell 1.76% to 1,642.37 and the RTS decreased 4.83% to 781.31.

“Russian investors have several reasons of concern. The major reason is the escalation of the Ukrainian conflict and growing geopolitical risks,” Vasily Oleynik, analyst at ITinvest, said.

After a new outbreak of hostilities in Ukraine over the weekend, U.S. Treasury Secretary Jacob Lew said that the U.S. has additional instruments to increase pressure on Russia.

Another risk for the market stems from parliamentary elections in Greece, which were won by radical leftist party Syriza, that is likely to cut investor appetite for risky assets, the analyst said.

The stocks were also depressed by the decreasing Brent price, which fell below $48.5 per barrel, Andrey Rozhkov, analyst at Metropol, said.

The possibility of S&P cutting Russian rating to junk still exists and restricts market growth, the analyst said.

Another negative factor was the Russian ruble weakening by over 2 rubles against the U.S. dollar and by 1.7 rubles against the euro, which was caused by the falling Brent and enforced by decreased demand for the national currency because of the end of mineral extraction tax payment period, Gleb Zadoya, head of Profit Group’s analytical department, said.

Exporters, particularly oil and gas, metals sectors outperformed the market, while the financial and banking sector fell on the ruble devaluation.

Magnit fell 1.79% to 11,540 rubles on news that its founder and major shareholder Sergei Galitsky is decreasing his stake in the company little by little, Oleynik said.

TMK rose 1.8% to 51 rubles on a report of strong operating results for October–December 2014 and 2014.

Norilsk Nickel rose 3.41% to 10,755 rubles on CEO Vladimir Potanin’s words that the stock is fundamentally oversold, Vitaly Manzhos, analyst at Nord-Capital, said.

Severstal rose 4.97% to 616.15 rubles and NLMK increased 4.2% to 82,845 rubles after the companies published strong operating results.

Sberbank fell 6.14% to 60.49 rubles in light of the ruble fall and VTB, in which the state injected 310 billion rubles via OFZ bonds, decreased slightly by 1.88% to 0.0626 rubles.

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

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	-6.14	60.49	9.461
Gazprom	-3.16	148.00	4.272
Lukoil	+0.56	2864.90	3.995
Norilsk Nickel	+3.41	10755.00	2.568
Surgutneftegas pref	-1.27	38.93	2.543

(63.3930 rubles – U.S. $1)

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