Russian stocks to fall at opening due to inflation hike in US

MOSCOW, May 13 (PRIME) -- The Russian stock market is likely to start Thursday’s trade with a slight contraction on investor concerns about expanding U.S. inflation, analysts said.

“It looks like the growth phase on the international markets was suspended. Concerns about growing inflation in the U.S. and a sooner than expected reduction of the U.S. stimulation measures were grounded. The Wednesday U.S. inflation data was not simply bad, it was astonishing, as the indicator rose to a record for the past 12 years,” Alor Broker senior analyst Alexei Antonov said.

The U.S. indices lost more than 2% on the news, but the Russian market was calm.

“Today, the futures for the U.S. indices rise by 0.2%, but there is no certainty that large investors will start buying cheap assets and that the sales will not return after opening of the U.S. trade floors. That is why we will start the day with a slight contraction,” Antonov said.

The oil price, one of the key indicators for the Russian market, lost about 1% on Thursday morning, but is still very comfortable for the Russian companies, this is why investors may only take their profits instead of starting large-scale sales, Antonov added.

“We expect mixed dynamics. The guidance for the MOEX Russia Index is the range of 3,650–3,700,” Georgy Vashchenko, head of the department for operations on the Russian stock market of investment company Freedom Finance, said.

One of the important corporate events of the day is Russian telecom giant Rostelecom’s financial report for January–March. Its growth is expected to amount to 9% and to stay at around 10% in the future, but investor reaction to the report may be restrained because of the weak dynamics of the shares of telecommunications companies in the coming weeks, Vashchenko said.

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