Russian stocks may fall on fears of 4 rate increases by Fed

MOSCOW, Jun 14 (PRIME) -- Russian stocks may fall on Thursday morning in line with the global stock indices as the U.S. Federal Reserve System (Fed) has hinted at the possibility of four rate increases in 2018 late on Wednesday, analysts said.

“Today, the RTS index is likely to correct downwards following the world indices. The reason for stronger sales was an adjusted macroeconomic indicators forecast by the Fed, which increases the probability of four increases of the basic interest rate this year,” Anton Startsev, senior analyst at investment company Olma, said.

Fed’s Wednesday increase of rates and the forecast hurt the stock indices, while the U.S. dollar’s rate and the yield on 10-year U.S. treasuries – instruments that many market players use as safe haven contracted in the day, Startsev said.

Vitaly Manzhos, senior risk manager at investment company Nord Capital, said that the background for the Russian market is negative at the beginning of the day. Futures for the U.S. stock indices fell within 0.1%, the Brent oil price lost 0.3%, Japan’s Nikkei225 index shrank 0.7%, and Hong Kong’s Hang Seng index decreased 0.7%, he said.

“We expect the MOEX Russia Index to open with a moderate contraction of up to 0.5% in a 2,260–2,265 range. The levels of 2,250 and 2,240 will act as the closest support, while 2,280 and 2,290 will become the resistance,” Manzhos said.

In the second half of the day, the U.S. is to release a slew of statistics, while investors will also track the news from the meeting of the European Central Bank on its monetary policy, Manzhos added.

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