Russian stocks seen neutral ahead of new sanctions

MOSCOW, May 6 (PRIME) -- The Russian stock market would likely open with marginal changes on Friday ahead of the announcement of new E.U. sanctions, while the oil prices grow, analysts said.

"We think that neutral dynamics of the MOEX Russia Index will persist. The market may take a wait and see approach before the long holidays, if there is no important market news in general," Vasily Karpunin, head of BCS World of Investment’s department for information and research, said.

"A final draft of the E.U. sixth package of sanctions may become such news. Its terms were published earlier, but there are media statements about the lack of consensus on the restrictions on Russian oil supplies to the E.U."

The Brent price consolidated above U.S. $110 after rising 0.7% on Thursday. According to Karpunin, the possible supply restrictions from Russia were the key factor for the trend, while the Chinese lockdowns played a temporary, but important role. Thursday's OPEC+ decision to raise the quotas by 432,000 barrels per day did not affect the prices, because the producers make less oil than the quotas allow. The U.S. announced a surprising replenishment of the strategic reserves, partially erasing the effect of earlier sales.

The U.S. stock market futures decreased by 0.2%, China's Shanghai Composite shrank by 1.8%, Japan's Nikkei225 grew by 0.5%, which, according to Vitaly Manzhos, senior analyst at investment company Algo Capital, will form a mixed background for the start of the Russian session.

Manzhos estimated the MOEX Russia Index range at 2,370–2,440 at the opening with the levels of 2,350 and 2,330 as support and the 2,450 and 2,470 as the resistance. Consolidation of Thursday's evening would likely continue on Friday. A selloff can start on expectations that the sanctions will be announced during the holidays.

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