Russian stocks seen flat on geopolitical tensions, high oil prices

MOSCOW, Feb 7 (PRIME) -- The Russian stock market is to open neutrally on Monday, as the oil prices and the key foreign markets increased in the morning, but the worries that the war with Ukraine will begin offsets any positive trends, analysts said.

"The MOEX Russia Index could not keep above 3,500 last week. This is a moderately negative technical signal, meaning the lack of a strong desire to buy amid the remaining political and sanction risks. Only record high oil prices kept the market from falling," Alor Broker senior analyst Alexei Antonov said.

Andrei Vernikov, head of the investment analysis and education department at investment company Univer Capital, said that after the February 4 closing, a newspaper said Russian invasion of Ukraine started, but the report was later proved incorrect and withdrawn. According to Vernikov, such statements work as scare tactic.

The oil prices reached U.S. $93.5 per barrel, the U.S. futures firmed in the morning, but the Russian market eased during the morning session, which, according to Antonov, probably means that the opening of the main session would be neutral, and the market would be volatile later in the day.

The financial sector is the outsider of the Russian market because of the highest sanction risk among the Russian companies. The intent of Western countries is serious, judging by a meeting of the U.S. presidential administration with local banks' executives, where possible restrictions were on the agenda, Antonov said.

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