Russian stocks to edge up at opening thanks to background

MOSCOW, Jun 20 (PRIME) -- Russian stocks are likely to open higher on Thursday as the external background supports purchases in local shares, while the latest comment of the U.S. Federal Reserve System (Fed) left almost no doubt that it will cut the rates very soon, analysts said.

“We expect the MOEX Russia Index to open with a moderate increase of about 0.2–0.3% in the range of 2,765–2,770. The levels of 2,760 and 2,750 will act as the closest support, while 2,780 and 2,790 will become the resistance,” Vitaly Manzhos, senior risk manager at investment company Nord Capital, said.

After a moderately positive start of the day, the index may continue growing to 2,775–2,780 as the background sends positive signals for the national market. The U.S. stock index futures grew by 0.3–0.7% in the morning, while the Brent oil price gained 1.5%, the futures for gold added 2.7%, China’s Shanghai Composite rose 2.1%, and Japan’s Nikkei225 by 0.5%, Manzhos said.

“Today the stock market may rise at the beginning of trade in the framework of a favorable upward correction in reaction to the Fed’s Open Market Committee meeting, as traders’ expectations that the baseline interest rate will fall soon following Chairman Jerome Powell’s news conference increased,” Olma’s senior analyst Anton Startsev said.

Mikhail Poddubsky, senior analyst at Promsvyazbank, said that the dividend season was in full swing with Norilsk Nickel having a dividend cutoff today, but the favorable background outweighs the possible negative impact from that.

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