Russian stocks may open flat on mixed external background

MOSCOW, May 17 (PRIME) -- The Russian stock market is likely to start the Tuesday trade with a marginal dynamics, as the external background does not prompt any strong movements, analysts said.

Bogdan Zvarich, senior analyst at financial supermarket Banki.ru, said that the mood of players on the foreign bourses was positive at the beginning of the day. The leading Asian bourses were rising by up to 1.3%, and the futures for the U.S. stock indices were gaining up to 0.4%. But the Brent oil price was sagging by 0.3% to levels lower than U.S. $114 per barrel.

“In spite of the continuous geopolitical risks and a neutral external background, the purchases may keep on prevailing in the Russian shares at the beginning of the day, which will allow the MOEX Russia Index to make a step toward 2,400,” he said.

Vitaly Manzhos, senior risk manager at investment company Algo Capital, said that a slight worsening of the oil prices on Tuesday morning creates a mixed background for the Russian market.

“We expect the main trade session in Russia to start with an up to 1% change of the MOEX Russia Index in the range of 2,340–2,390. … After the opening with a moderate change, the MOEX Russia Index is very likely to switch into consolidation,” Manzhos said.

“Regarding the MOEX Russia Index, the scenario of a wide-range sideways consolidation is still relevant. If the background remains calm, chances for it to return to the 2,460–2,500 threshold of the sideways channel emerge, while a fall to 2,170–2,240 is not likely to happen,” Vasily Karpunin, head of the information and analytics content at BCS World of Investment, said.

On Tuesday, the shares of the main oil companies may outperform the market as the E.U. failed to agree on the Russian oil embargo, and the ruble’s rate may fall slightly, he said.

“The countries that were against the embargo – Hungary and Slovakia – demanded compensations of the possible losses from the measures. The E.U. is unable to do that as it would create a precedent so that other countries could demand compensations. As a result, the countries would have to introduce separate restrictions against the Russian oil, and there will be internal control over compliance with them, not a collective one. Given the situation, risks of a large-scale reduction of supplies to Europe are shrinking,” Karpunin said.

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