Russian stocks may fall on low oil prices, negative environment

MOSCOW, Feb 11 (PRIME) -- Russian stocks are likely to fall at Thursday opening as oil prices, which remain low even after positive signals from the U.S. Federal Reserve System (Fed) and after contraction of the U.S. oil reserves, and a negative background of foreign stock floors leave no chance of a positive start of the day, analysts said.

“The technical analysis data shows that the RTS index may restart its contractionafter a return to previously broken level of 700 points. The mood of Janet Yellen’s yesterday’s presentation to the U.S. Congress allowed the market participants to suppose that the Fed’s basic rate increase is delayed for a long-term future, but it did not lead to any significant reaction of the world market,” Anton Startsev, a senior analyst at investment company Olma, said.

An unexpected contraction of oil reserves in the U.S. have failed to push the crude market up because growth of gasoline and oil product reserves were higher than expected, Startsev added.

The Brent oil price fell 0.49% to U.S. $30.69 per barrel as of 8.49 a.m. Moscow time. Futures for U.S. stock indices are falling prior to the start of Thursday’s trading session, and Asian floors show mostly negative dynamics, making the background for the start of the Russian market’s trading session negative.

“We expect the market to open with a significant fall of about 0.5% lower in the range of 1,720–1,725 points of the MICEX index. Levels of 1,710 and 1,700 will become the closest support for the index, while 1,740 and 1,750 points will act as resistance marks,” Vitaly Manzhos, a senior analyst at Bank Obrazovanie, said.

The Russian market will track the situation at world’s trading floors, oil prices, and the ruble. If the background for the market worsens during the day, the MICEX index may test a psychologically important level of 1,700, Oleg Shagov, the head of investment company Solid’s research department, said.

Some sort of influence may be exerted on the Russian market by the U.S. jobless claims data, which is to be released later in the day, Manzhos added.

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