Russian stocks likely to fall at opening on coronavirus fears

MOSCOW, Jan 28 (PRIME) -- The Russian stocks are likely to contract at opening on Tuesday as the market will likely trade in line with the international bourses that fell on fears of the coronavirus outbreak, analysts said.

Anton Startsev, senior analyst at investment company Finam, said that the U.S. and European stock markets closed very low on Monday, and the Asian floors continued the trend on Tuesday.

“The risks that downward correction of the RTS Index will deepen are still present. Though the Russian market remains undervalued according to the fundamental multipliers as compared with the other global bourses, high volatility of international floors will likely remain as a restraining factor for investors in the short term,” Startsev said.

Yelena Kozhukhova, analyst at Veles Broker, agreed that the MOEX Russia Index and the RTS Index will fall in the short-term.

“The beginning of the week was characterized by serious sales on all major stock and commodity bourses in the world, with the only exception being defensive assets and gold in the first place. The sales potential in many shares has not been fully realized yet,” Kozhukhova said, adding that investors would continue tracking the coronavirus news.

“Fears that the global economy may slow down due to the coronavirus outbreak remain the major reason for large-scale sales of risky assets all around the world. There has been no improvement in the situation so far. On the contrary, the epidemic is only growing,” Alor Broker’s analyst Alexei Antonov said.

Nevertheless, the futures for U.S. stock indices edged up on Tuesday morning, which might result in a slight increase of the Russian indices at the opening, but risks that the sales will resume are still high, Antonov said.

Today Norilsk Nickel is likely to outperform the market due to a noticeable increase in prices for nickel and palladium, Antonov said.

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