Russian stocks may fall following decreasing oil prices

MOSCOW, Nov 28 (PRIME) -- Russian stocks may open lower on Monday as investors will price in falling oil prices, analysts said.

“We expect the market to open with a significant decrease of around 0.5% of the MICEX index around 2.085–2,090. The levels of 2,080 and 2,070 will be the closest support, while 2,100 and 2,110 will act as a resistance level,” Vitaly Manzhos, a senior analyst at Bank Obrazovanie, said.

On November 25, the Brent oil price plunged to U.S. $47.24 per barrel from $49.00 per barrel, after OPEC cancelled a meeting with non-OPEC states because of the failure to agree on production cuts inside the cartel.

Manzhos said that the local market will price in the oil price dynamics in the morning, but a significant part of the negative impact will be softened by the contraction of the ruble.

“The uncertainty around OPEC’s actions is still in place. On the one hand, we have news about a possible visit of Algeria and Venezuela representatives to Russia to discuss production curbs. On the other hand, the Saudi Arabian oil minister said that prices may stabilize without participation of OPEC, which jeopardizes the output freeze decision on November 30,” Anton Startsev, a senior analyst at investment company Olma, said.

Oleg Shagov, head of investment company Solid’s research department, said that the local market will continue to track oil prices.

Shagov said that publication of financial results by multi-industry holding AFK Sistema, the country’s second largest bank VTB, and container operator TransContainer will also have an impact on the market.

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