Russian stocks to continue falling without growth reasons

MOSCOW, Apr 19 (PRIME) -- The Russian stock market is likely to continue falling on Tuesday as investors are focused on the geopolitical situation, analysts said.

“We expect pressure on the Russian shares to persist on Tuesday. Investors are still focused on the geopolitical risks, which will lead to further contraction of the MOEX Russia Index that may go below 2,300. The main scenario for the next few weeks is a fall of the market to the range of 2,000–2,200,” Bogdan Zvarich, senior analyst at financial supermarket Banki.ru, said.

The market mood abroad may be seen as moderately positive, with the Asian bourses staying in the green zone although the Chinese and Indian market trade near Monday’s closing. The futures for the main U.S. indices gained 0.3%, and the futures for the Brent oil blend are almost flat, Zvarich said.

But Otkritie Research’s analyst Andrei Kochetkov said that the external background sends mixed signals. Strengthening of the U.S. dollar shows low risk appetite and an investor flight from the risky to the U.S. dollar assets. On the other hand, high prices for commodities should support the Russian shares.

“Nevertheless, we see that market activity is rather low, which presupposes a further slide of the indices,” Kochetkov said.

Vasily Karpunin, head of the BCS World of Investment’s department of information and analytics content, said that the technical picture of the MOEX Russia Index creates no optimistic mood.

“There are no obvious reasons for the market to grow soon. Nothing has changed as compared with the Monday trading session, this is why the market has no reason to change the sentiment. As a result, the risk for the Russian shares to continue falling is rather high although they are technically oversold,” he said.

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