Russian stocks fall on tough negotiations with US State Secretary

MOSCOW, Apr 12 (PRIME) -- The Russian stock market decreased on Wednesday as negotiations between the U.S. Secretary of State Rex Tillerson and Russia’s Foreign Minister Sergei Lavrov were overclouded by mutual discontent between the states, which made investors nervous, analysts said.

The MICEX decreased 1.52% to 1,947.88 and the RTS fell 1.13% to 1,078.72.

“The negotiations between the U.S. Secretary of State and the Russian Foreign Minister are evidently not groundbreaking. Furthermore, the disagreements on the Syrian issue have emerged in a more noticeable way, taking the bilateral relations several years back. The market reacted accordingly, pricing in possible risks of deterioration,” Otkritie Broker analyst Andrei Kochetkov said.

InstaForex analyst Igor Kovalyov said that a statement by President Vladimir Putin that the level of the Russian–U.S. trust has deteriorated since Donald Trump took presidency is making investors upset. 

Alfa-Capital analyst Andrei Shenk said that foreign markets are also reacting to the recent political events with stress, and the VIX index of U.S. market volatility expectations has reached a peak since November 2016. 

Starting with a U.S. strike against a Syrian air base, the situation has unfolded into more tensions with Russia. Investors are also worried about harsh mutual U.S.–North Korea statements, he said.

Securities of banks and companies with high stakes owned by non-residents, Sberbank, Rosneft and Gazprom, were the Wednesday’s session outsiders, Kochetkov said.

Kovalyov said that RusHydro was plummeting on media reports that the company is considering participation in construction of aluminum giant UC RUSAL’s Taishet Aluminum Smelter. The initiative is thought to be doubtful, he said.

Mechel grew on the back of prolongation of its supply deal with Baosteel Resources, Kochetkov said.

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

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	-3.67	150.28	8.169
Gazprom	-0.75	125.05	3.641
Lukoil	-0.62	2949.50	1.680
Rosneft	-1.63	325.10	1.355
Magnit	-1.78	9100	1.355

(56.9552 rubles – U.S. $1)

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