Russian stocks to open down following oil prices

MOSCOW, Jan 31 (PRIME) -- Russian stocks are likely to open lower on Tuesday as the unfavorable environment provides the market with no growth drivers, while oil prices are also under pressure from expectations of the U.S. statistics, analysts said.

“The ultimate influence of the key factors that provide a significant impact on behavior of the Russian stock market is moderately negative at the beginning of the day. Prices for April futures of the Brent oil are under pressure from forecasts of growth of the U.S. oil reserves and higher shale oil production in the country,” Oleg Shagov, head of investment company Solid’s research department, said.

The Brent oil price lost 0.634% to U.S. $55.17 per barrel as of 9.14 a.m. Moscow time, according to the ICE exchange.

The U.S. stock futures are easing at the beginning of the day, and major Asian bourses are also falling, Shagov said.

“We expect the Russian stock market to open in a 2,230–2,235 range of the MICEX index and suppose that the stock indicator will look for ways out of consolidation shown yesterday on its graph by a distinctive ‘inside’ bar with minimums and maximums lying within the previous bar. Yesterday’s significant contraction of trade volumes on the Moscow Exchange confirms it,” Shagov said.

Anton Manayev, head of trade operations department at investment company Olma, said that the downward correction of the RTS index may continue, although its depth is unclear as oil prices are still unstable.

“Individual purchases in the most promising shares from the point of view of dividend yield – like shares of Lukoil, Inter RAO, Gazprom, MTS and others – and expected corporate events in some shares will support the index,” he said.

Timur Nigmatullin, an analyst at investment company Finam, said that the unfavorable external background was characterized by correction on foreign markets, which started after U.S. President Donald Trump limited access of migrants to the U.S., creating the risk of a strengthening protectionism policy in general and worsening relations between large states.

“Still, the MICEX index may grow 0.1–0.3% in the first half of the day in spite of the unfavorable background. On Monday, the market compensated completely the overbought condition it suffered last Friday on expectations of successful talks of (Russian President Vladimir) Putin and Trump on sanctions,” Nigmatullin said.

Nigmatullin also said that local investors will focus on Norilsk Nickel’s operating results for October–December 2016 and the whole 2016, which the company is to publish.

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