Russian stocks slide on North Korean test, weak oil, strong ruble

MOSCOW, Sep 4 (PRIME) -- Russian stocks decreased on Monday due to tensions in the wake of the latest North Korea’s missile test, a strong ruble, and contraction of oil prices, analysts said.

The MICEX fell 0.38% to 2,003.32 and the RTS decreased 0.80% to 1,091.83.

“Investors have no will to risk now due to geopolitical tensions, which is unsurprising. North Korea has held a new missile test, the U.S. once again spoke about a possible retaliation. Of course, the augmentation of quite a strong ruble to the mix does not make the MICEX interesting for investors. We should not forget that oil prices were also under pressure in the first half of the day,” Irina Rogova, an analyst at Forex Club group of companies, said.

The Brent oil price fell 0.038% to U.S. $52.73 per barrel as of 5.59 p.m. Moscow time, according to the ICE exchange, but earlier on Monday it decreased as low as $52.01.

Andrei Kochetkov, an analyst at Otkritie Broker, said that the volume of trade in the MICEX was thin as the U.S. was celebrating the Labor Day.

He also said that all markets were in turmoil after North Korea had tested its most powerful nuclear weapon as of today, and official sources even said that they tested a hydrogen bomb. U.S. President Donald Trump responded by saying that Washington may use nuclear weapons against North Korea, while South Korean media reported that the northern neighbor was preparing a new test of a ballistic missile.

As a result, demand for defensive assets, mainly gold, soared and propelled shares of gold producing companies higher, Kochetkov said. Polymetal International and Polyus grew 3.18% to 673.90 rubles and 2% to 4,700 rubles, respectively.

Uncut diamond mining giant ALROSA lost 2.47% to 77 rubles as prospects of a restart of the company’s recently flooded Mir mine were delayed indefinitely, Kochetkov said.

Below are the MICEX’ five most active stocks on Monday:

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	+0.24	184.10	4.711
Gazprom	-0.34	117.00	1.881
VTB	-2.87	0.06163	1.285
Norilsk Nickel	-0.58	9746.00	1.274
Lukoil	-0.69	2895.00	1.108

(58.0557 rubles – U.S. $1)

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