Russian stocks to fall at opening as oil prices remain low

MOSCOW, Dec 5 (PRIME) -- The Russian stock market is likely to start Tuesday’s trading session a bit lower as the recent contraction of oil prices will undermine the shares, analysts said.

“The MOEX Russia Index fell by 0.89% to 3,114.41 (on Monday), and the RTS index decreased by 1.67% to 1,076.99. The investors continued closing their long positions and taking their profit prior to the New Year. The yield on many shares ranged from 40% to 230% annually. The fall of the MOEX Russia Index sped up, and I expect it to contract further to 3,020 by December 15,” BitRiver financial analyst Vladislav Antonov said.

The Brent oil price fell to $77.79 and got close to the important support level. The market is very skeptical about a recent OPEC+ decision to reduce their oil production. In spite of the existing quotas, Russia announced an additional voluntary reduction of exports by 500,000 barrels per day, but the investors fear that the actual contraction of production and exports would be below the announced figures, Antonov said.

“After high volatility of the previous week, the risk of the oil prices falling further to $74.5 per barrel have grown,” he said.

Cifra Broker said in a research note that the background for the Russian market was neutral -- the Japanese index Nikkei 225 lost 0.67%, while the Chinese index Shanghai Composite edged up by 0.04%.

Russia’s Finance Ministry of Russia is to publish a report on the country’s energy revenue and disclose the sum of foreign currency operations under the budget rule later in the day, it said.

“In spite of the energy market stabilization, pressure on the Russian shares may continue during the trading session today, and the MOEX Russia Index will continue falling to about 3,100 as a result. In addition to the current level of oil prices, our market could gain some additional negative momentum because of the worsening of the investor appetite towards risky assets on the external bourses,” financial marketplace Banki.ru senior analyst Bogdan Zvarich said.

At the same time, weakening of the national currency should restrain sales in Russian shares, he said.

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