Russian stocks may open flat on oil price stabilization, ahead of Fed meet

MOSCOW, Dec 10 (PRIME) -- Russian stocks may open flat on Thursday as the oil price has stabilized, while investors will abstain from investment ahead of U.S. Federal Reserve System’s (Fed) next week’s meeting on key rate, analysts said.

“Mixed movements of key external factors that provide significant impact on the Russian stock market is close to neutral at the beginning of the day…We expect the market to open close to 1,730 of the MICEX index and suppose that the index will remain close to zero later in the day,” Oleg Shagov, head of investment company Solid’s analytical department, said.

The Brent oil price grew 0.47% to U.S. $40.45 per barrel as of 9.02 a.m. Moscow time. U.S. stock index futures are rising, while Asian floors show positive dynamics.

“A lull is possible in the closest future as investor activity will fade prior to a December 15–16 Fed meeting, where a decision to raise the basic interest rate for the first time since 2006 can be made,” investment company Olma senior analyst Anton Startsev said.

“The oil price has stabilized above $40 per barrel, but its dynamics provides no grounds for a significant movements of the market.”

The morning improvement of external background only compensates a Wednesday evening decrease of futures for Russian blue chips, so no significant increase of the MICEX index will happen in the first minutes of Thursday trade, Vitaly Manzhos, a senior analyst at Bank Obrazovanie, said.

“We expect the market to open with insignificant movements within a 1,730–1,735 range of the MICEX index. The closest support levels will remain at 1,720 and 1,710, while 1,740 and 1,750 will act as resistance,” Manzhos said.

Andrei Vernikov, a deputy CEO for investment analysis at investment company Zerich Capital Management, said that some positive trends could be introduced by media reports that Italy stands against an automatic prolongation of the E.U. anti-Russian sanctions for six months from January 31 and asked Luxembourg, the current president country of the E.U., to initiate discussion of the matter.

“The fact itself creates the possibility that the sanctions may be prolonged for three months instead of six. And after three months a new discussion will take place…And already in 2017 a long process of a gradual lifting of sanctions from Russia may begin,” Vernikov said.

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