Russian stocks may fall on weak crude, geopolitical tensions

MOSCOW, Nov 30 (PRIME) -- The Russian stock market may fall at the opening on Tuesday, following weak crude oil dynamics and rising geopolitical tensions, as well as fears of the new COVID strain affecting global markets, analysts said.

“Deteriorating external conjuncture and the dominance of sellers in oil will put pressure on the Russian stock market today,” Vladimir Solovyov, chief analyst at PSB Bank, said.

The situation on global markets as moderately negative prior to the Russian opening, he said. Key Asian indices are down, led by South Korea and China amid weak statistical data. Futures on U.S. and European indices are down, while Brent crude oil prices are losing more than 1%, returning to below $73 per barrel.

Andrei Vernikov of Univer Capital said a neutral opening is expected despite the current bearish sentiment on the markets, rising geopolitical tensions and oil prices gaining a downward momentum.

According to Solovyov, investors will follow the publication of consumer confidence index in the U.S. for November. The Bloomberg consensus forecast expects the index to decline to 110.7 points, compared to the previous month. The negative sentiment in the world markets will remain intact during the day, he said.

Andrei Kochetkov of Otkritie Research also said that “the external background before the start of trading in Russia is slightly negative. Oil is getting cheaper again, as well as metals.”

As Kochetkov said, the Russian market has corrected its losses after the Friday news of the new COVID strain, but the decline may resume on geopolitical tensions.

Vitaly Manzhos of Algo Capital expects the MOEX Russia Index to open with a noticeable decline in the range of 0.3–1.0%, as the external background before the beginning of trading in Russia can be confidently characterized as negative.

Later on it could stabilize near the opening level waiting for new signals for the directional movement. In the second half of the day Russian traders will be guided by the dynamics of oil futures and the nature of the opening of the stock market in the U.S., Manzhos said.

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