Russian stocks may open flat as oil prices stop falling

MOSCOW, Jul 29 (PRIME) -- The Russian stock market may open flat on Wednesday because oil prices have started to consolidate and traders believe that there will be no strong decrease in the future, and also investors will be somewhat passive before the release of the U.S. Federal Open Market Committee (FOMC) minutes, analysts said.

“Despite a certain deterioration of the external background, we forecast a neutral opening of the MICEX index. Probably, in the first half of the day, this index will continue consolidation above an important support of 1,600, which began yesterday,” Bank Obrazovanie’s senior analyst Vitaly Manzhos said.

The Brent oil price has stopped an abrupt falling and it is consolidating at about U.S. $53 per barrel, which will allow the Russian stock market to open neutrally, Oleg Shagov, senior analyst at investment company Solid, said.

The U.S. stock market futures are also little changed on Wednesday morning, which is another factor determining unnoticeable changes in Russian indices at the session’s start, he said.

There will most probably be a standstill on Wednesday because investors will be waiting for the release of documents from the last meeting of the FOMC, while the FOMC comment itself will provide valuable information as to when interest rates in the U.S. will grow, so after the release, market trends will be strong, Olma senior analyst Anton Startsev said.

On Tuesday in the evening, the MICEX rebounded from the 1,560–1,570 support notch, and it will likely continue the upward trend if the external background is positive; the resistance zone is at about 1,660, Shagov said.

The RTS continued the decline on Tuesday because of weakening of the ruble, albeit at a slower pace than before. There can be an upward correction in the RTS on Wednesday as well, Manzhos said.

The U.S. will release oil reserve figures which are crucial, bearing in mind the current situation on the oil market, Finam analyst Anton Soroko said.

Investors believe that oil prices have reached their lows, that is why U.S. energy companies rallied on Tuesday, Promsvyazbank analyst Ilya Frolov said.

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