Russian stocks to continue rising as tensions escalate

MOSCOW, Oct 10 (PRIME) -- The Russian stock market is likely to start the Tuesday trading session higher as escalation of tensions between Palestine and Israel triggers oil price growth and ruble volatility, analysts said.

“The Russian indices’ rise (on Monday) was caused by a rapid growth of the oil prices and a deep fall of the ruble in the first half of the day. The oil prices grew because of the war between Palestine and Israel. The ruble was weak in morning trade, and the MOEX Russia Index will try to move up to 3,195 (at the start of trading on Tuesday) and later correct downward to 3,115,” BitRiver’s financial analyst Vladislav Antonov said.

The Brent oil price grew by 4.4% on Monday to U.S. $88.13 per barrel, but the European traders ignored the morning rally, which shows that the situation will only have a limited impact on oil production in Iran. The prices may grow further if the anti-Iranian sanctions are expanded, which may lead to the closure of the Strait of Hormuz used by other oil exporters, Antonov said.

“We expect the MOEX Russia Index to move in a 2,150–3,200 range today, with the latest strengthening of the ruble acting as the main risk factor for the market because it could lead to sales in the shares of exporters. But it will have a lesser impact on the shares of oil and gas companies given the high oil prices,” Alexei Golovinov, senior analyst at Promsvyazbank, said.

The key corporate event of the day is the publication of Sberbank’s financial results for September. Investors will want to see the impact of the high key rate on the bank’s profit, Golovinov said.

End