Russian stocks to continue rising together with oil prices

MOSCOW, Nov 20 (PRIME) -- The Russian stock market is likely to rise at the start of the trading session on Monday because the continuous growth of the oil prices should support the national market, analysts said.

“We expect purchases to prevail in the Russian shares today at the start of trade, and the market should continue its attempt for recovery. Positive dynamics of the oil prices should become the main driver here that would support our securities. As a result, the MOEX Russia Index should hold above 3,200 and try to climb to 3,220–3,240,” financial marketplace Banki.ru’s senior analyst Bogdan Zvarich said.

Alexei Antonov, head of Alor Broker’s investment consulting department, said that the oil prices are rising prior to the Sunday meeting of the OPEC+ alliance. The members of the alliance have repeatedly said that they don’t like the oil price below $80 per barrel, and may take measures including a general reduction of the OPEC+ oil production or further voluntary reduction of oil exports by Russia and Saudi Arabia.

“The oil price is gaining about 1 percentage point this morning to slightly above $81 per barrel. It is a good reason for the Russian stock market to continue an upward rebount,” Antonov said.

But Vladislav Antonov, financial analyst at BitRiver, said that the ruble growth may undermine the MOEX Russia Index.

“The MOEX Russia Index grew by 0.54% to 3,205.34 while the RTS index fell by 0.63% to 1,122.10 (on November 17). The MOEX Russia Index grew on the background of the falling ruble andrising oil prices. On Monday morning, the ruble is rising again, and the oil prices continue growing. The MOEX Russia Index may correct downward at the start of the trading session, but it should be only a slight correction,” he said.

The U.S. dollar lost some ground because investors expect the U.S. Federal Reserve to wind down its tough monetary policy soon. The ruble should receive additional support this week because local companies will pay taxes and exporters would continue complying with demands on conversion of their foreign currency revenue. This would undermine the MOEX Russia Index, but if the buyers hold the market above 3,185 in the next two to three days, the probability of the index recovering to 3,268 will increase, BitRiver’s Antonov said.

End