Russian stocks may open unchanged on flat oil prices, quiet markets

MOSCOW, Jan 18 (PRIME) -- Russian stocks may open close to flat on Wednesday as the oil price dynamics and the external background provide it with no strong signals for any kind of movement early in the day, analysts said.

“We expect the Russian stock market to open close to 2,180 of the MICEX index and suppose that the indicator may show a technical upward rebound after losses in five consecutive trading sessions if the external background improves,” Oleg Shagov, head of investment company Solid’s research department, said.

The background for the Russian market is neutral as oil prices are fluctuating around U.S. $55.6 per barrel waiting for oil reserves and production data in the U.S. Major Asian floors show no common dynamics, and U.S. stock index futures are firming, Shagov said.

Alyona Afanasyeva, senior analyst at Forex Club group of companies, said that on Tuesday the Brent oil price almost rose to $57 per barrel after an unexpected comment from U.S. President-elect Donald Trump that the U.S. dollar is too strong threatening competitiveness of the U.S., but the price plunged shortly after due to news from Brazil, which rejected Saudi Arabia’s offer to cut oil production.

“This is why the market begins to understand that not all countries are willing to cooperate and balanced supply and demand will be reached slower than expected. Which is always a reason to sell oil,” Afanasyeva said.

Anton Manayev, head of trade operations department of investment company Olma, said that further correction of Russian indices is possible at the beginning of the day. “Major indices are still close to significant support levels,” he said.

During the day, releases of the OPEC monthly report and a block of the U.S. macro statistics will have an impact on the trade, Manayev said.

Shagov said that investors will pay special attention to a speech of U.S. Federal Reserve System’s Chairwoman Janet Yellen later in the day because of the Trump’s statement about the U.S. dollar. Among local events that may affect the market, Shagov listed the release of results of steelmaker Novolipetsk Steel (NLMK) and a speech of Alexei Mordashov, chairman of the board of directors of steelmaker Severstal.

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