Russian stocks seen flat on US market recovery, political woes

MOSCOW, Aug 24 (PRIME) -- The Russian stock market will likely open with marginal changes on Monday on the back of improving market moods in the U.S. and oil price recovery, but political uncertainty will likely prevent growth, analysts said.

Olma senior analyst Anton Startsev said, "Suspension of a downward correction of the RTS index is possible today at the start of trade. Reports of possible easing of the U.S. restrictions on the Chinese software triggered some recovery in the Asian stock markets quotations, which may favor a price recovery on the developing markets in general."

He also said that the political and economic uncertainty will nip a strong upward trend on the stock market in the bud.

The U.S. stock market closed higher on August 21 thanks to continuing support from the monetary authority and economic statistics, Sergei Drozdov, analyst at investment company Finam, said. The Composite purchasing managers' index (PMI) rose to 54.7 in August from 50.3 in July, an 18-month high. Housing sales on the secondary market increased by 24.7% in August. High-tech companies led the market.

Drozdov said that the oil prices reacted to market volatility on August 21 falling below the lower margin of aU.S. $44.5–45.70 range and aiming at a further decline. Baker Hughes reported growth of U.S. drilling rigs by 11 to 183, which may pressure the market on Monday, he said.

On Monday morning, Brent rose 0.20% to $44.44 as of 9:11 a.m., Moscow time.

Drozdov put the MOEX Russia Index support level at 2,973 and 2,950, resistance at 3,000.

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