Russian stocks to fall as background favors sales on Thursday

MOSCOW, Aug 26 (PRIME) -- The Russian stock market is likely to start the Thursday trade with a contraction as the external background, namely dynamics of oil prices and the Chinese trade floors, favors sales at the beginning of the day, analysts said.

“Oil prices are falling today, therefore our market is to open with a slight contraction. It is obvious though that the potential decrease of oil prices will be slight prior to the weekend, as meteorologists forecast storms in the Gulf of Mexico, and bad weather may lead to disruptions in oil production,” Andrei Vernikov, head of the investment analysis and education department of investment company Univer Capital, said.

In addition to that, the Asian markets are falling today as the Chinese authorities continue their tough regulation policy over operations of private companies, and it concern investors, Vernikov said.

Vitaly Manzhos, senior risk manager at investment company Algo Capital, said that the background for the Russian stock market was moderately negative at the beginning of the day as the futures for the U.S. stock indices were falling by up to 0.2%, the Brent oil price was losing 0.5% after the Wednesday growth, and the gold futures were shrinking by 0.2%. The Shanghai Composite index contracted by 0.7%, and the Japanese index Nikkei225 decreased by 0.1%, he said.

“We expect the MOEX Russia Index to open with a moderate fall of 0.1–0.4% within the range of 3,870–3,880. The levels of 3,860 and 3,850 will act as the closest support lines, while the levels of 3,890 and 3,900 will remain as resistance,” Manzhos said.

As usual, the Russian market will focus on dynamics of oil prices and on the start of trade in the U.S. in the second half of the day. The release of a large block of economic statistics by the U.S., including preliminary dynamics of the gross domestic product (GDP) in April–June and weekly data on jobless claims, could have an indirect impact on the Russian market, he added.

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