Russian stocks to fall at opening due to unfavorable background

MOSCOW, Jun 18 (PRIME) -- Russian stocks are likely to edge down at opening on Thursday on fears of a new coronavirus outbreak, analysts said.

“The euphoria from the support provided by the U.S. Federal Reserve System has ended, and investors again fear exacerbation of negative consequences for the economies from a second wave of the coronavirus infection,” Alor Broker senior analyst Alexei Antonov said.

“The external background continues to worsen in the morning. The futures for the U.S. stock indices lose slightly less than 1%, though the oil prices are stable.”

Taking into account that the Russian market has been looking weaker than the Western floors over the past few days, it should open with a contraction. “The ruble indicator of the market is very likely to try to entrench below a 2,700–2,810 mark. If the situation becomes unfavorable, the contraction may worsen tomorrow,” Antonov said.

Vitaly Korenev, analyst at investment company Finam, said that the optimism that dragged major stock indices of the world to their new highs on Tuesday and that was caused by announcements of new stimulation measures was short-lived.

“The European trade floors closed higher yesterday, but the U.S. markets failed to stay within the growth trend except the ever growing NASDAQ. The Asia–Pacific Region also doesn’t look cheerful today,” he said.

But Vitaly Manzhos, senior risk manager at investment company Algo Capital, said that worsening of the external background in the morning doesn’t look severe or threatening. The futures for the Russian indices grew on Wednesday evening creating conditions for a neutral opening of the market on Thursday.

“We expect the MOEC Russia Index to open with a moderate deviation within 0.5% in the range of 2,725–2,750. The levels of 2,720 and 2,710 will act as the closest support, while 2,760 and 2,780 will remain as significant resistance,” Manzhos said.

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