Russian stocks to decrease as volatility on Western floors rises

MOSCOW, Jan 14 (PRIME) -- The Russian stock market may open with a slide on Wednesday because the oil price dynamics has remained negative, while volatility on Western stock markets has increased diminishing traders’ interest in risks, analysts said.

“No reasons for strong market dynamics have appeared. Oil price decline has remained a negative factor (Brent futures are trading close to U.S. $46 per barrel level),” Anton Startsev, CFA senior analyst, said.

“Meanwhile, volatility at Western trading floors has started growing (the VIX index rose by almost 5% and exceeded 20 point level). If this process becomes permanent, stock markets in general are likely to see risk demand decline,” he said.

The Russian market will see an about 0.5% downward gap at Wednesday opening, Denis Khripushin, analyst at 2trade.ru, said.

In the U.S., the S&P 500 fell 0.26% and the Dow Jones slid 0.15% on Tuesday, which will also weigh upon the Russian market, Khripushin said.

Investors still fear that Standard & Poor’s may downgrade Russia’s sovereign rating, Startsev said.

On Wednesday, Russian Energy Minister Alexander Novak will meet European Commission’s Vice President for Energy Union Maros Shevchovich to discuss Ukrainian gas issues, and this event will be a milestone for Russian investors, Finam analysts said.

The euro zone will release industrial output figures for December. The U.S. will post retail sales data, export and import prices for December; business inventories data and EIA oil stocks report. All the news will be the most important foreign statistics releases for Russian investors, analysts said.

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