Russian stocks to fall at opening as oil price falls, G20 looms

MOSCOW, Jul 7 (PRIME) -- Russian stocks may contract at the opening on Friday as the oil price is falling while investors are anxiously waiting for the news from the G20 summit and the first meeting of President Vladimir Putin with his U.S. counterpart Donald Trump, analysts said.

“The RTS index may correct downwards today at the beginning of trade in line with the oil prices, as the oil market reacted rather nervously to the news about recovery of the U.S. oil production,” Anton Startsev, a leading analyst at investment company Olma, said.

He also said that that market will assess Russia’s geopolitical risks by the news from the G20 meeting between Putin and Trump.

Oleg Shagov, head of investment company Solid’s research department, also said that the background prior to the start of the trade at the Russian market is negative as oil prices are under pressure from expectations of a possible higher U.S. drilling. Futures for the U.S. stock indices are changing insignificantly, while the major Asian floors are in the red zone.

“We expect to see the opening of the Russian market in a 1,915–1,920 range of the MICEX index and suppose that investors will be anxiously waiting for news from the G20 summit later in the day,” Shagov said.

Ilya Frolov, senior stock market researcher at Promsvyazbank, said that the mood at world markets at the end of the week shows improvement of downward correction ideas.

“Lower oil prices, North Korea’s missile tests, weak economic statistics from the Eurozone and the U.S., uncertainty about the direction of monetary policies of the European Central Bank and the Federal Reserve System – all these pushed investors to take profit in risky assets,” Frolov said.

Taking into account the negative external background and lower oil prices, the Russian stock market may fall to 1,900 of the MICEX index during the day after opening with a contraction to 1,905–1,908 points, Frolov said.

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