Russian stocks may rise at opening on foreign background support

MOSCOW, Oct 26 (PRIME) -- The Russian stock market is likely to edge up at opening on Tuesday as support from the external background will continue, analysts said.

“We expect the MOEX Russia Index to open with insignificant changes or with a moderate increase of up to 0.3% in the range of 4,250–4,270. The levels of 4,240 and 4,220 will act as the closest support, while 4,290 and 4,300 will become the resistance,” Algo Capital’s senior risk manager Vitaly Manzhos said.

“In the first few minutes of trade the MOEX Russia Index may price in a moderate improvement in the external background.”

The futures for the U.S. indices gained 0.1–0.5%, the Brent oil price added 0.1%, and the Japanese index Nikkei225 increased by 1.8%. At the same time, the gold futures lost 0.1%, and the Chinese index Shanghai Composite fell by 1.8%, Manzhos said.

Andrei Vernikov, head of Univer Capital’s department of investment analysis and education, said that the Russian market might start the day with a slight increase as the bulls may still price in the previous improvements in the external background.

“More and more scientists say that the Delta variant of the COVID-19 could be the last significant change, which means that the existing coronavirus vaccines and treatment protocols will remain relevant for long,” Vernikov said.

“The stock markets were also happy with the news that Chinese developer Evergrande paid on the bonds, while the Chinese government said that it would work to prevent a slowdown of economic growth.”

But Alor Broker senior analyst Alexei Antonov said that the external background did not favor purchases at the beginning of Tuesday’s trade on the Russian market, as the U.S. indices traded mixed and the prices for commercial and precious metals fell.

“The oil price also failed to climb above the resistance level of U.S. $86 per barrel, and stayed over $85. … That is why we expect a slight profit taking in the Russian shares today as there is no reason for growth,” Antonov said.

The oil market is waiting for the results of a November 4 meeting of OPEC+, where the members of the alliance are to decide on production quotas. OPEC+ is very likely to maintain the planned increase of 400,000 barrels per day because not all countries can ramp up their output since investment has been low in the past several years, he said.

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