Russian stocks to fall on oil destabilization, market volatility

MOSCOW, Apr 21 (PRIME) – The Russian stocks are likely to open lower on Tuesday after a staggering slump in the WTI oil blend price and global markets volatility, analysts said.

“Today the RTS Index may experience a downward correction at the start of trade pressured by the external factors -- destabilization of the oil market is followed by higher volatility of the stock floors, as the VIX index calculated by the CBOE grew by almost 15% yesterday to 43.8,” investment company Olma’s senior analyst Anton Startsev said.

Investor readiness was also hit on Monday as political uncertainty was exacerbated by a CNN report citing U.S. sources that the North Korean leader was in a critical condition after a surgery, Startsev said.

Georgy Vashchenko, head of the department for trade operations on the Russian stock market at investment company Freedom Finance, said that the oil prices continue falling due to a significant deficit of free capacities and position closing by large players prior to expiration of contracts, which pushed the Middle Eastern contracts down to minus U.S. $35 per barrel on Monday.

“The unprecedented situation worsens concerns of investors. Possible risks of ecological incidents and losses will force the governments take emergency measures to resume business activity during the pandemic or seek solutions for utilization of oil and reduction of output to prevent a worse situation in May,” he said.

The Brent oil price lost 0.709% to $25.39 per barrel as of 9.04 a.m. Moscow time, according to the ICE exchange.

“We expect negative dynamics. The market will price in the external background, and shares of the oil and gas sector will continue their fall,” Vashchenko said.

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