Russian stocks may fall on external risks, sell-off trend

MOSCOW, Dec 14 (PRIME) -- The Russian stocks market may open with a considerable decrease on Tuesday due to high risks from geopolitical tensions over Ukraine, which have already proven to be a strong factor pushing the sell-off trend, analysts said.

“The Russian stock market continues to look weak and lag behind other key global markets. The reason for such a strong drop in our indices is the uncertainty of many foreign investors about the scenario of the situation around Ukraine. Wary of a sudden escalation, (trading) participants are reducing risks. The general background is neutral this morning, but after such sell-offs the volatility in the market usually remains high,” Vasily Karpunin of BCS Financial Group said.

According to Alexei Antonov of Alor Broker, Tuesday’s morning trading session started with a collapse, with many highly liquid stocks falling 5–10%. There are no growth drivers for the Russian stock market, and under the current conditions, it looks quite logical for major players to take profits and divert their capital to other markets.

“The MOEX Russia Index is moving within a downtrend with the lower boundary at 3,590 points. Chances to see a meaningful rebound before Wednesday’s Federal Reserve meeting are minimal. Judging by this morning’s trading, the bears will try to break this level and form a more aggressive downward corridor,” Andrei Vernikov of Univer Capital said.

Brent crude oil futures are down for the third day in a row, Otkritie Research’s Oleg Syrovatkin said, and the external background looks negative, as Asian stock indices are down along with oil prices, and futures on the S&P 500 show a symbolic increase.

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