Russian stocks rise on US treasuries’ yield, geopolitical easing

MOSCOW, Nov 17 (PRIME) -- The Russian stock market grew on Wednesday on market satisfaction with contraction of the yield on U.S. treasuries, while the lack of bad news from the Belarusian borders with the European states supported the ruble-denominated shares, analysts said.

The MOEX Russia Index rose 0.70% to 4,149.02 and the RTS increased 1.98% to 1,802.52.

“On Wednesday, the market attempted to correct the fall of the previous sessions as it reacted to recovery of the international bourses and oil prices,” Dmitry Babin, stock market expert at BCS World of Investment.

Early in the morning, the yield on the U.S. treasuries rose reflecting probability of an early start interest rates hikes by the U.S. Federal Reserve System. The yield on 10-year U.S. treasuries renewed its 3-week highs, but started falling later improving the market mood, Babin said.

The ruble assets received additional support from the absence of signs of worsening situation on the borders of Russia and other former Soviet republics, he added.

“The MOEX Russia Index and the RTS Index switched into the green zone close to the end of trading as they received support from weakening geopolitical tensions caused by the reports on negotiations of (Belarusian President Alexander) Lukashenko and (German Chancellor Angela) Merkel on the situation on the Belarusian–Polish border,” Veles Capital analyst Yelena Kozhukhova said.

Andrei Kochetkov, senior analyst at Otkritie Research, said that the growth of the Russian ruble resulted in the RTS Index outperforming the MOEX Russia Index.

“Weakening geopolitical risks immediately triggered strengthening of the ruble, which is a high-yield currency,” Kochetkov said.

The consumer sector was among the losers with grocery retailers Magnit, Lenta, and X5 Retail Group and children goods retailer Detsky Mir losing 2.11%, 1.88%, -0.70%, and 0.03%, respectively. According to Romir Consumer Scan Panel, Russians’ nominal spending grew by 19% on the year and 6% on the month in October, with real spending growing by 9% and 4%, respectively. It is obvious that the figures were caused by inflation and high inflationary expectations, so the increase in consumption may switch into a long-term fall, he said.

He also said that the American depositary receipts of online marketplace Ozon were among the leaders gaining 6.99% as J.P. Morgan upgraded recommendation to Buy from Hold with a target price of U.S. $60.

Below are the MOEX Russia Index’ five most active stocks on Wednesday:

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Gazprom	+4.00	350.26	22.768
Sberbank	+0.99	341.25	15.091
Lukoil	0.00	6946.50	7.221
Surgutneftegas	-2.26	44.20	5.375
Norilsk Nickel	+0.04	22634.00	5.166

(72.5553 rubles – U.S. $1)

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