Russian stocks to fall as risk appetite shrinks, oil price slides

MOSCOW, Feb 5 (PRIME) -- Russian stocks are likely to contract at Monday’s opening on falling oil prices and as investor risk appetite has shrunk because of a negative background, analysts said.

“Today the downward correction of the RTS index is likely to worsen. The bourses of the world experience higher volatility – the VIX index has exceeded 17 as investors are revising their risk estimates due to higher rates of the U.S. treasuries,” Anton Startsev, a leading analyst at investment company OLMA, said.

Vitaly Manzhos, a senior risk manager at investment company Nord Capital, said that the general background prior to the start of trade in Russia is severely negative as the U.S. futures are falling by about 0.5%, Japan’s Nikkei225 is losing 2.3%, Hong Kong’s Hang Seng is shrinking by 1.8%, and the Brent oil price sliding by about 1%.

“We expect a negative start of trading with a significant decrease of the MOEX Russia Index of about 0.5% close to 2,270. The levels of 2,260 and 2,250 will become the closest significant support, while 2,290 and 2,300 will act as resistance,” Manzhos said.

Oleg Shagov, head of investment company Solid’s research department, also said that the background for the national market was negative at the beginning of the day. “We expect the MOEX Russia Index to open in the range of 2,270 and suppose that the stock indicator will be under the pressure of sales due to the unfavorable external background,” Shagov said.

Shagov also said that investors will track releases of business activity indices for Russia, Europe, and the U.S. during the day as well as 2017 financial results of national air carrier Aeroflot, operating results for 2017 of fertilizer producer PhosAgro, and the meeting of the board of directors of Moscow United Electric Grid Company (MOESK), which will discuss the company’s new dividend policy.

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