Russian stocks may open flat as markets wait for Fed’s statement

MOSCOW, Jun 18 (PRIME) -- Russian stocks are likely to open unchanged on Tuesday as the global financial markets will be in a lull ahead of a U.S. Federal Reserve System’s (Fed) monetary policy release on Wednesday, analysts said.

“Consolidation of the RTS Index, which reached the levels of five years ago, may continue at the beginning of the day today. Activity of market players is restricted in general prior to the announcement of results of the Fed’s Open Market Committee and comment of the Fed’s chairman that is to happen on Wednesday evening,” Olma’s senior analyst Anton Startsev said.

The statement and the comment may give prompts about Fed’s plans to reduce its benchmark interest rate as contraction during the June meeting is very unlikely, Startsev said.

Mikhail Poddubsky, senior analyst at Promsvyazbank, also said that he expected the MOEX Russia Index to consolidate around the current level until the Fed announces its decision.

Alor Broker analyst Alexei Antonov said that foreign markets have no strong drivers that the Russian market could use.

“There are no interesting internal ideas either. That is why we expect the stock market to continue its sideways movement with a tendency for a slight contraction due to the dividend gaps and weak dynamics of oil prices,” Antonov said.

“We expect the MOEX Russia Index to open with an insignificant contraction around 0.1–0.3% close to 2,730. The levels of 2,720 and 2,710 will act as the closest support, while 2,750 and 2,760 will become the significant resistance,” Vitaly Manzhos, senior risk manager at investment company Algo Capital, said.

“After a moderately negative start of the day, the MOEX Russia Index may switch into sideways movement close to the opening. The morning worsening of the external background is not critical enough to cause active sales on the local stock market,” he said.

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