Russian stocks may open higher following US tax reform approval

MOSCOW, Dec 4 (PRIME) -- Russian stocks may open slightly higher on Monday buoyed by international markets encouraged by the passage by the U.S. Senate of a tax reform bill suggested by President Donald Trump, analysts said.

“Today the MOEX Russia Index may firm slightly. Although the oil prices have suspended their growth, the situation at the world markets may improve generally after the U.S. Senate has passed a tax reform resolution the over the past weekend,” Anton Startsev, a senior analyst at investment company Olma, said.

The Brent oil price fell 0.41% to U.S. $63.47 per barrel as of 9.04 a.m. Moscow time, according to the ICE exchange.

“At the same time, the approval of the tax reform means a higher demand for the U.S. securities and, correspondingly, for the U.S. dollar, this is why the increase in ruble prices may be partially compensated by the U.S. dollar’s strengthening against the ruble,” Startsev said.

Oleg Shagov, head of investment company Solid’s research department, also said that the background prior to the start of the trading session in Russia is positive even despite the contraction of oil prices.

“Futures for the leading U.S. stock indices are growing noticeably in the morning. After long debates, the U.S. Senate approved the bill on the largest tax reform over the past 30 years at a late-day meeting on Saturday, and the reform cuts the fiscal burden on business,” Shagov said.

“We expect the Russian stock market to open close to 2,105 points of the MOEX Russia Index, and suppose that the stock indicator may try to regain part of previous week’s losses during the day thanks to improvements in external background.”

But Vitaly Manzhos, a senior risk manager at investment company Nord Capital, said that the contraction of oil prices makes the background for the Russian market mixed, and favors a negative opening of the local bourse.

“We expect the market to open with a moderate decrease of about 0.2–0.4% of the MOEX Russia Index close to a 2,100-point mark. The levels of 2,090 and 2,080 will become the closest support levels, while 2,110 and 2,120 will act as a resistance level,” Manzhos said.

The release of the U.S’ October industrial and durable goods orders may have an impact on the trade later in the day, Manzhos said.

Shagov also said that local investors will track the Moscow Exchange data on trade turnover in October during the day.

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