Russian stocks mixed on high oil prices, strong ruble

MOSCOW, Oct 30 (PRIME) -- Russian stocks closed mixed on Monday as the RTS index was supported by higher oil prices and the ruble, while growth of the MICEX index was restricted by the negative external background, analysts said.

The MICEX eased 0.17% to 2,065.25 and the RTS increased 0.49% to 1,124.05.

“On the one hand, the Brent oil price traded at above $60 per barrel, but the positive impact from that was restrained by a higher ruble,” Andrei Kochetkov, an analyst at Otkritie Broker, said.

The ruble’s growth pushed down the shares of metals companies, which were overheated before by the news that China is cutting its steel output, Kochetkov said. Steelmakers Novolipetsk Steel (NLMK), Severstal, and Magnitogorsk Iron and Steel Works (MMK), lost 1.43% to 133.31 rubles, 0.51% to 900.90 rubles, and 1.50% to 43.85 rubles, respectively.

“The Friday weakness of the U.S. dollar–denominated RTS index was replaced by its advanced increase thanks to a correctional strengthening of the ruble against the North American currency. Speaking of the ruble-denominated MICEX index…local bulls were not in the mood to restart purchases. They were restrained by mixed dynamics of the European bourses. The U.S. stock index futures have also been in the red zone since the morning today,” Vitaly Manzhos, a senior risk manager at investment company Nord Capital, said.

The external geopolitical factor still weighs upon the local market, including by new and targeted U.S. sanctions against some Russian companies and the government. “This shows that the ongoing story of external restrictions against Russia is far from being over…despite international tensions around the North Korean nuclear program and Iranian missile tests,” Manzhos said.

Vasily Oleinik, an analyst at investment company Finam, said that foreign investors are concerned about the risk coming from China and the U.S. “The Chinese stock market closed with a 0.7% contraction today, but judging by condition of the local debt market – this is just the beginning,” he said.

Investors are massively selling Chinese bonds on expectations that the Chinese central bank will mop up excessive liquidity from the market to fight inflation and an uncontrolled rise in lending, Oleinink said, adding that the U.S. tax reform may also change investment mood at all world markets in an instant.

Kochetkov also said that foreign investors’ sentiment about the Russian market is negative, as they withdrew $8.7 million from Russia-dedicated funds in the week ending with October 25 after 10 consecutive days of capital inflow.

He also said that shares of metals giant Norilsk Nickel gained 0.55% to 10,590 rubles on reports that it increased the nickel output by 10% on the year in July–September.

Below are the MICEX’ five most active stocks on Monday:

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	-0.54	195.00	6.278
Lukoil	-0.21	3058.00	2.522
Gazprom	+0.03	125.98	2.435
Magnit	-0.53	8022.00	1.699
Norilsk Nickel	+0.55	10590.00	1.516

(58.0833 rubles – U.S. $1)

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