Russian stocks may fall at opening as oil prices under pressure

MOSCOW, Feb 15 (PRIME) -- Russian stocks are likely to contract at Wednesday opening as oil prices are under pressure after a report on rising U.S. oil reserves, analysts said.

“Today intra-day dynamics of the Russian stock market will continue to form under the influence of the oil price behavior, the Western stock indicators, and changes in the ruble rate,” Oleg Shagov, head of investment company Solid’s research department, said.

The American Petroleum Institute (API) report that the U.S. oil reserves grew by 9.94 million barrels and gasoline reserves rose 700,000 barrels will act as the market driver, Shagov said.

The Brent oil price lost 0.61% to U.S. $55.63 per barrel as of 9.13 a.m. Moscow time, according to the ICE exchange.

“We expect that Russian stock market to open close to 2,140 points of the MICEX index and suppose that the stock indicator may try to test the support zone located in the range of its annual minimums during the day,” Shagov said.

Ilya Frolov, a senior capital market analyst at Promsvyazbank, characterized Tuesday’s speech by U.S. Federal Reserve System’s Chairwoman Janet Yellen to the U.S. Congress as “hawkish” as she noted the need for the Fed to increase the rate at one of its upcoming meetings as a delay may lead to recession.

“Rhetoric of the Fed and a fall of oil prices provide a marginally negative impact on the MICEX index at the beginning of the day in addition to the current trend of the ruble’s strengthening,” Frolov said.

Timur Nigmatullin, an analyst at investment company Finam, said that the fall of oil prices may result in a 0.5% weakening of the ruble, which will support positive revaluation of exporters’ shares. Taking into account the favorable external background with rising major Asian floors and U.S. stock index futures in the green zone, the MICEX index may grow 0.5% in the first half of the day.

The market will also be driven by releases of financial reports by Magnitogorsk Iron and Steel Works (MMK) calculated under International Financial Reporting Standards and by power holding Inter RAO calculated under Russian Accounting Standards. Shagov said that investors will also track a speech of Central Bank Chairwoman Elvira Nabiullina in parliament.

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