Russian stocks seen opening flat as oil stops growing

MOSCOW, Jan 11 (PRIME) -- Russian stocks are likely to open flat on Thursday as the local market lacks strong drivers after the oil price has stopped growing, analysts said.

“We expect a neutral start of trade with an insignificant change of the MOEX Russia Index in a 2,230–2,235 range. The levels of 2,220 and 2,200 points will remain the closest significant support, while 2,240 and 2,250 will act as resistance levels,” Vitaly Manzhos, a senior risk manager at investment company Nord Capital, said.

The background prior to the start of trade in Russia is mixed, as the U.S. stock index futures grew within 0.15%, the Brent oil price contracted slightly, futures for gold slid 0.06%, Japan’s Nikkei225 lost 0.6%, and Hong Kong’s Hang Seng fell only 0.03%, Manzhos said.

“The major risk factor for the local market is the possibility of oil futures developing a downward correction following the long-term highs they reached the day before,” Manzhos said.

The Brent oil price contracted 0.16% to U.S. $69.09 per barrel as of 9.00 a.m. Moscow time, according to the ICE exchange.

“We expect the Russian stock market to remain close to yesterday’s closing level of the MOEX Russia Index of 2,223.3 at opening today, and suppose that the stock indicator will pause today and put its growth on hold after a continuous New Year rally of six consecutive trade sessions,” Oleg Shagov, head of investment company Solid’s research department, said.

Anton Startsev, a leading analyst at investment company Olma, also said that the RTS index may suspend its upward movement at the beginning of the day affected by external factors.

“The activity of buyers at emerging markets is less and less consistent, as the MSCI EM index fell 0.6% yesterday, and the growth of the energy market also slowed down after the Brent futures had got close to a psychologically important level of $70 per barrel. Technical analysis points to the necessity of the RTS index to suspend growth to ease the overbought state,” Startsev said.

Shagov also said that investors will track news on the amount of foreign currency purchases in January that the Finance Ministry is to announce, and the release of uncut diamond sales by mining giant ALROSA for December 2017.

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