Russian stocks seen growing slightly on oil price recovery

MOSCOW, Aug 14 (PRIME) -- The Russian stock market is to edge up on Friday at the start of the session because of an oil price recovery, analysts said.

"We expect opening of the MOEX Russia Index with a moderate increase of 0.1–0.5%, in the range of 3,085–3,095. The levels of 3,070, 3,060 will be nearest support and 3,100 and 3,120 will be the important resistance,” Vitaly Manzhos, senior risk manager at investment company Algo Capital, said.

“After opening with moderate growth, the MOEX Russia index can approach 3,100 and become balanced temporarily at that level."  

The U.S. stock market closed mixed. Sergei Drozdov, analyst at investment company Finam, said that moderate investor pessimism was triggered by the uncertainty over new stimuli in the U.S., hopes for which earlier caused a surge of indices to new highs.

President Donald Trump accused the Democrats on Wednesday of blocking negotiations on incentives after he refused to comply with their spending demands. An employment report was issued on Thursday, showing that benefit applications fell below 1 million for the first time since March, which might cast doubt on the need for support of the economy, Drozdov said.

Brent fell by 0.77% to U.S. $45.09 per barrel on Thursday. Drozdov said that the dynamics was caused by a downgrade of a demand forecast by the International Energy Agency (IEA) by 140,000 barrels in 2020. The estimate for 2021 was cut by 240,000 barrels.

Supply rose by 2.5 million barrels per day to 90 million barrels per day in July after Saudi Arabia finished its voluntary additional restriction, he said. 

But on Friday morning, Brent rose by 0.33% to $45.11 as of 9:06 a.m., Moscow time.

Drozdov put the MOEX Russia Index support level at 3,060 and 3,020, resistance at 3,080 and 3,100. The RTS local support level was set at 1,310 and 1,290 and resistance at 1,327 and 1,340.

Olma’s senior analyst Anton Startsev did not rule out an increase of the RTS index despite an unfavorable background.

According to Drozdov, China’s industrial output and retail sales statistics will be in focus of the market, and next week, investors will watch negotiations between China and the U.S.   

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