Russian stocks to fall on Argentinian primaries, lower oil

MOSCOW, Aug 13 (PRIME) – The Russian stocks are likely to open lower on Tuesday similar to other emerging markets shuttered by an unexpected victory of a leftist party in Argentinian primaries, while decreasing oil prices will provide no support, analysts said.

“The RTS index may start today’s trading with a downward correction, as the emerging markets in general are under pressure as the risk of Argentina default after the unfavorable results of primary presidential elections has worsened,” investment company Olma’s senior analyst Anton Startsev said.

According to Bloomberg, CDS shows that the probability of Argentina’s default in the next five years rose to 75% from 50% on August 9. The MERVAL index of the Buenos Aires Stock Exchange plummeted by 38% on Monday, or by 48% in U.S. dollar terms, pushing demand for defensive assets higher, Startsev said.

“The external background prior to the start of trade on Tuesday is moderately negative. Oil prices are easing after yesterday’s growth, while signals from the international stock exchanges are mixed,” Yelena Kozhukhova, analyst at Veles Capital, said.

The Brent oil price slid 0.343% to U.S. $58.37 per barrel as of 8.57 a.m. Moscow time, according to the ICE exchange.

“The Russian stock indices and the ruble are likely to contract moderately at the beginning of the day because of an unfavorable mood of international players and investors running away from the risk. One should not expect serious sales at the moment…but there are also no noticeable reasons for markets to be optimistic, while companies like Polymetal and Polyus may be of interest due to a rally in gold prices,” Kozhukhova said.

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