Russian stocks to fall undermined by oil prices, geopolitics

MOSCOW, Jan 13 (PRIME) -- The Russian stock market is likely to start the main trading session on Thursday with contraction as falling oil prices and the unfavorable geopolitical situation support the sellers, analysts said.

“The external background is moderately negative this morning. The U.S. indices remained almost flat after the closure of our main trade session on Wednesday, while the Asian bourses trade lower on Thursday. The futures for the S&P 500 index lost 0.15%, and the Brent oil price shrank by 0.25%,” Vasily Karpunin, head of the information and research department at BCS World of Investment, said.

Thursday’s Russia–NATO negotiations have failed to solve the serious disputes of the two sides, while sanction threats ramp up, Karpunin said.

“This year is the 100th anniversary of creation of the USSR, and the West fears that the USSR could be reborn in some way this year, this is why it increases pressure on Russia. U.S. Deputy Secretary of State Victoria Nuland said a month ago that there were concerns that Vladimir Putin is trying to recreate the Soviet Union as his legacy,” Andrei Vernikov, head of the investment analysis and education department at investment company Univer Capital, said.

The latest sanction bill of the U.S. democrats suggests sanctions against the key sectors of the Russian economy – banks, the Nord Stream 2 pipeline, the sovereign debt and top public officials if military tensions on the Ukrainian border escalates, Vernikov said.

Alor Broker senior analyst Alexei Antonov said that the downward correction of oil prices is only logical taking into account the lack of drivers for further growth. The political background does not create any positive mood for investors, and even the futures for the U.S. indices fell by about a third of a percentage point on Thursday morning.

“The MOEX Russia Index will not be able to stay above 3,800 today, this is why the Russian stock market trend is still downward, and the 3,500 target of the MOEX Russia Index is still relevant,” Antonov said.

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