Russian stocks may fall on US trade issues, ahead of OPEC+ meeting

MOSCOW, Dec 4 (PRIME) -- The Russian stock market will likely edge down at opening on Wednesday due to the mounting issues in the U.S. trade policies and investor wish to avoid risks ahead of an upcoming meeting of the OPEC plus nonmember oil output reduction deal monitoring committee.

“Investors have reacted negatively to new White House foreign trade initiatives. Besides reintroducing the duties on steel and aluminum from Argentina and Brazil, President Donald Trump threatened on Monday to set up to 100% duties on U.S. $2.4 billion worth of goods from the Fifth Republic in retaliation to the French digital tax, which in Trump’s opinion discriminates American companies,” Finam analyst Sergei Drozdov said.

Besides, Trump said he had set no deadline for a trade deal with China and could wait until the end of the U.S. presidential elections, Drozdov added.

Mikhail Poddubsky, senior analyst at Promsvyazbank, said that whereas in the middle of the last week, a vast majority of market participants believed that the U.S. would not introduce duties against Chinese goods on December 15, now, the probability of the adverse scenario has increased.

The oil prices grew 0.44% on Tuesday on investor hopes for the OPEC meeting, Drozdov said, adding that on Wednesday, the prices are likely to be supported as the American Petroleum Institute (API) reported a decrease of crude reserves.

Alor Broker analyst Alexei Antonov said that a rollover of the OPEC+ deal until July 2020 is no longer a secret, but an additional output reduction by 400,000 barrels per day still is uncertain.

Poddubsky said that next week’s voting of the U.S. Senate Committee on Foreign Relations on possible sanctions against Russia carries an additional risk for the Russian assets.

According to Drozdov, the support level for the MOEX Russia Index stands at 2,880 and 2,850. The resistance notch is 2,900. The local support level for the RTS index stands at 1,405 and 1,400, and resistance at 1,420.

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