Russian stocks to fall as investors still fear coronavirus

MOSCOW, Feb 13 (PRIME) – The Russian stocks are likely to open lower on Thursday as investor worries about the coronavirus outbreak strengthened after the number of infected people in China increased, analysts said.

“Today the earlier increase of the RTS Index may stop as worries about the expansion of the coronavirus in China have returned. Changes in the methodology of diagnosis of the disease caused a rapid hike in the number of infected people by about 15,000, or by 35%, in one day,” investment company Olma’s senior analyst Anton Startsev said.

Yelena Kozhukhova, analyst at Veles Capital, said that the MOEX Russia Index and the RTS Index failed to reach the resistance levels of 3,125 and 1,570, respectively, on Wednesday, which proves uncertainty of the bullish players in spite of the optimism that the Western bourses have demonstrated lately.

“It is worth keeping in mind that the coronavirus epidemic has not reached its peak, and negative news around that may change the mood of bourses into more pessimistic ones. The fate of the short-term trend of the Russian market is still unclear,” Kozhukhova said.

Promsvyazbank’s senior analyst Bogdan Zvarich also said that the increase of the number of infected people spoils the background for the Russian market as the foreign bourses are contracting.

“On the previous day, investors were ready to buy, but sales prevail this morning. In Asia, the majority of indices are in the red, losing about 0.7%. The futures for the major U.S. indices fell by 0.3%. The closest futures contract for the Brent oil price failed to stay above U.S. $56 per barrel, losing about 1% as compared with the previous closure,” Zvarich said.

“Taking the background into account, we expect the Russian stock index to contract at the beginning of the day. Losses of the MOEX Russia Index may amount to 0.5% as it will move closer to 3,100. Later in the day, sales may persist as the market will continue its downward movement while negative trends prevail at the external markets.”

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