Russian stocks to fall on negative environ, contracting oil price

MOSCOW, Dec 6 (PRIME) -- Russian stocks are likely to open lower due to an unfavorable external background and contraction of the Brent oil price, analysts said.

“The ultimate influence of the key external factors that have a significant impact on the mood of the Russian financial market is moderately negative at the beginning of the day, according to our estimates. The Brent oil price…is falling after the release of industry statistics by the American Petroleum Institute, which showed a colossal growth in stocks of gasoline and distillates in the U.S.,” Oleg Shagov, head of investment company Solid’s research department, said.

The Brent oil price lost 0.38% to U.S. $62.62 per barrel as of 8.55 a.m. Moscow time, according to the ICE exchange.

“We expect the market to open close to 2,110 of the MOEX Russia Index and suppose that the stock indicator may even fall below the consolidation range during the day because of the worsening environment,” Shagov said.

Vitaly Manzhos, a senior risk manager at investment company Nord Capital, also said that the external background did not favor a positive opening of the Russian market as the U.S. stock index futures have fallen 0.5%, Japan’s Nikkei225 index contracted by almost 2%, and Hong Kong’s Hang Seng lost 1.8% early in the day.

“We expect the market to open with a significant fall of up to 0.5% of the MOEX Russia Index around a 2,105-point mark. The levels of 2,100 and 2,090 will become the closest support, while 2,120 and 2,130 will act as a resistance level,” Manzhos said.

Shagov also said that local investors will track auctions of OFZ bonds, which will show the degree of current interest of foreigners to ruble assets compared to an increasing risk of introduction of new anti-Russian sanctions.

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