Russian stocks may fall on mixed environment, falling oil

MOSCOW, Dec 14 (PRIME) -- Russian stocks are likely to contract at opening on Wednesday as the mixed external background provides no support and oil prices are falling, while the upcoming release of results of the latest meeting U.S. Federal Reserve System (Fed) bear additional risks for the market, analysts said.

“Once again, a mixed external background had formed in the morning before the beginning of the trading session. Asia is trading in both directions, but still remains close to zero…while futures for the U.S. S&P 500 index is flat. The world floors froze waiting for results of the Fed’s two-day meeting,” Timur Nigmatullin, an analyst at investment company Finam, said.

The Brent oil price lost 1.08% to U.S. $55.12 per barrel as of 9.24 a.m. Moscow time, according to the ICE exchange.

“Taking into account the influence of the external background, and due to risks connected with the Fed’s meeting, I think that the MICEX index may fall within 0.5% in the first half of the day. At the same time, a 0.5–1% weakening of the ruble against the U.S. dollar is also possible due to the fall of oil prices and a run of capital for ‘quality assets’,” Nigmatullin said.

Vitaly Manzhos, a senior analyst at Bank Obrazovanie, said that the oil price contraction means sales at the Russian market early in the day.

“We expect the market to open with a noticeable decrease of about 0.4% of the MICEX index in a 2,235–2,240 range. The levels of 2,230 and 2,215 will become the closest support, while 2,250 and 2,260 will act as resistance,” Manzhos said.

Yevgeny Loktyukhov, head of Promsvyazbank’s research department, said that Russian indices keep a mid-term growth potential thanks to an inflow of capital into Russia-oriented stock funds and a stable ruble.

“Still, we still think that technical factors, which are connected to the fact that local assets are overbought, may prevail on the market in the coming days,” Loktyukhov said.

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