Russian stocks may fall following US indices lower at opening

MOSCOW, Nov 10 (PRIME) -- The Russian stock market is likely to edge down at Wednesday’s opening in line with the U.S. bourses decline, while the growth of oil prices should prevent a deep fall, analysts said.

“The oil prices are good, while trading on the Asian markets disappoints. What is also disappointing is that the futures for the U.S. indices fell,” Andrei Vernikov, head of the investment analysis and education department of investment company Univer Capital, said.

“I expect the market to demonstrate an insignificant contraction at opening, while support of the RTS index is at 1,820.”

Alexander Arutyunyan, senior economic at investment company Russ-Invest, said that the bulls may ramp up the rise on the oil market after the American Petroleum Institute published an unexpected 2.485 million barrel decrease of the U.S. crude oil reserves over a week.

“Moreover, the Energy Information Administration said in a report that the global and internal U.S. demand for oil have in fact returned to the level that existed in 2019, before the pandemic, and demand is recovering faster than supply, which triggers contraction of the reserves and an increase of prices,” Arutyunyan said.

Alor Broker senior analyst Alexei Antonov also thinks that the downward correction of the U.S. market prevents the Russian shares from growing.

“So far, the MOEX Russia Index maintains an upward long-term trend, but it looks like the benchmark is ready to break it and switch into a sideways movement,” Antonov said.

“If the situation on the overseas bourses does not improve, it may test the support level (of 4,100 of the MOEX Russia Index) already this week. On Wednesday morning, the futures for the U.S. indices prompt a slight downward correction.”

The increase of oil prices will not allow the Russian market to fall deep, he added.

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