Russian stocks seen flat ahead of central bank meeting on key rate

MOSCOW, Jul 21 (PRIME) -- The Russian stock market will likely open marginally changed on Friday, as investors will be waiting for a central bank’s decision on the key rate, analysts said.

"There is no reaction to new U.S. sanctions yet, as the market is waiting for a decision by the Central Bank of Russia. Economists forecast a 50 basis point key rate rise to 8% annually. I expect growth by 100 basis points. The rate is currently at 7.5% annually. The central bank may decide to raise the rate several times by 50 basis points each time," BitRiver financial analyst Vladislav Antonov said.

According to the analyst, the market will likely shrug off an increase of below 100 basis points.

Senior analyst at financial supermarket Banki.Ru Bogdan Zvarich said that the growing oil prices might trigger recovery of the MOEX Russia Index at the start of the trade from Thursday's losses. At the same time, the index would likely retrench to the upper margin of a 2,850–2,900 range at the end of the session, as investors may will want to take profit.

No deepening of the downward correction or a full-fledged downward trend on the market are expected, he said.

The U.S. Federal Reserve System is slated to decide on the key rate next week, and the market expects it a boost of 25 basis points, which would strengthen the U.S. dollar and weaken the oil prices to some extent, Antonov said. However, oil will be supported by OPEC+ and purchases for the U.S. strategic reserves.

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