Russian stocks may open flat on mixed background

MOSCOW, Sep 25 (PRIME) -- Russian stocks are likely to open neutrally on Monday as the external background provides investors with no strong drivers early in the day, analysts said.

“We expect the market to open with insignificant changes of the MICEX index at around 2,050. The levels of 2,045 and 2,030 remain the closest support level, while 2,060 and 2,070 will act as a noticeable resistance level…The mixed external background provides no clear signals for opening new positions in Russian shares for now,” Vitaly Manzhos, an analyst at investment company Nord Capital, said.

Prior to the start of trade in Russia, the U.S. stock index futures have fallen by about 0.1%, the Brent oil price has lost about 0.1%, the gold futures remain almost flat, and the Asian floors show no common dynamics with Japan’s Nikkei225 rising 0.5% and Hong Kong’s Hang Seng losing 1%, Manzhos said.

He also said that higher tensions between North Korea and the U.S. is a significant factor of uncertainty for the mid-term, as a possibility of a military conflict is a threat to the stock markets. But the situation supports oil prices, which in turn support Russian shares, he said.

“Technical analysis points to the possibility that the RTS index will continue its upward trend, but the external background does not favor purchases and may provide ground for a slight correction at the beginning of the day,” Anton Startsev, an analyst at investment company Olma, said.

The activity of buyers in Asia is low due to a recent cut of China and Hong Kong ratings by S&P Global Ratings. Europe also has an element of uncertainty, as preliminary data of September 24 parliamentary elections indicates that the ruling CDU/CSU bloc of parties will keep its leading position in a coalition government, Startsev said.

Oleg Shagov, head of investment company Solid’s research department, also said that the external background is neutral prior to the start of trade in Russia, meaning that the MICEX index may open in a 2,050–2,055 range and continue the day around the current levels.

On September 22, international rating agency Fitch changed Russia’s outlook to positive from stable. “Fitch’s positive outlook says that it expects Russia to maintain its macroeconomic stability and to increase its resilience against external shocks, which should improve investor optimism,” Shagov said.

He also said that the ex-dividend date for shares of fertilizer producer Acron and steelmaker Severstal should be noted among local corporate events that may have an impact on the market.

End