Russian stocks may open flat on neutral external background

MOSCOW, Jul 14 (PRIME) -- Russian stocks are likely to open flat on Thursday as neutral external background provides it with no valuable prompts, analysts said.

“The ultimate influence of external factors that have a significant impact on the mood of the Russian financial market is close to neutral today at the beginning of the day,” Oleg Shagov, head of investment company Solid’s analytical department, said.

The Brent oil price rose 0.985% to U.S. $46.72 per barrel as of 9.06 a.m. Moscow time, trying to climb to a $47 mark, Shagov said.

“We expect the market to open close to a 1,935 point mark of the MICEX index and suppose that the stock indicator will continue the day close to the current level,” Shagov said.

The general background prior to the opening of trading is neutral as U.S. stock index futures are increasing marginally after an almost flat Wednesday closure, while European stocks closed in the red zone on Wednesday and Asian floors are showing no common dynamics on Thursday, Anton Startsev, a senior analyst at investment company Olma, said.

“From the point of view of technical analysis, the retraction to above the 950 point level of the RTS index justifies a period of correctional consolidation, but a possibility of a further growth remains,” Startsev said.

Still, the MICEX index may fall by about 0.3% in the first half of the day. “Although no dividend cutoffs are expected in ‘heavy’ stocks, I expect that the national indicator will be under pressure from a strong ruble. This factor means possible negative revaluation of share prices of mineral companies,” Timur Nigmatullin, an analyst at investment company Finam, said.

But the morning correctional growth of oil prices may lead to a 0.3% increase of the MICEX index within a 1,940–1,945 range, Vitaly Manzhos, an analyst at Bank Obrazovanie, said. “The levels of 1,930 and 1,910 points will remain as closest support levels, while 1,950 and 1,960 will act as resistance,” Manzhos said.

The key event of the day is the meeting of the Bank of England. The market expects the regulator to cut the key rate by 25 basis points, which will bring some positive mood to stock markets, Mikhail Poddybsky, an analyst at TeleTrade, said.

Investors will also focus on a quarterly report of JPMorgan Chase. Local investors will also track a meeting of President Vladimir Putin with the government, where Putin will discuss implementation of the government’s plan aimed at stabilization of social and economic development, Shagov said.

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