Russian stocks to fall at opening as US inflation data scare investors

MOSCOW, Nov 11 (PRIME) -- The Russian stock market will start Thursday's trading with contraction in the wake of publication of the U.S. inflation statistics that triggered sales all around the world, analysts said.

“The release of the U.S. key inflation statistics, meaning its PPI and CPI, had a serious impact on almost all stock markets. It looks like the investors are gradually starting to understand the seriousness of the situation,” Alexnader Arutyunyan, senior economic at investment company Russ-Invest, said.

The oil price lost 2.84% on Wednesday, while the yield on all U.S. treasuries grew as the markets feared a U.S. rate hike. It could become the beginning of a long-awaited downward correction, but pro-inflationary growth of the stock markets may continue until the middle of net year and until it becomes clear when and how the U.S. Federal Reserve System increases the rate, Arutyunyan said.

“Today the MOEX Russia Index will price in the Wednesday evening sales with a fall,” Alor Broker senior analyst Alexei Antonov said.

“Support of the index lies slightly above 4,100, where the lower threshold of the upward channel has been staying since September 2020, and the market may test the support at opening. If the market remains below the support line, the mid-term investors will have to think seriously about reducing their long positions.”

Even though the futures for the U.S. markets and oil and metals prices rose on Thursday morning, there is no reason to think that investors forgot about inflation, and it is only a technical upward rebound when speculators try to take their profits, Antonov said.

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