Russian stocks to open flat as background favors no purchases

MOSCOW, Aug 11 (PRIME) -- The Russian stock market is likely to start the Wednesday trade in a neutral way as the external background does not prompt players of the national market to continue purchases at the beginning of the day, analysts said.

“The external background does not favor continuation of aggressive purchases this morning, as futures for the U.S. indices and the oil prices are slightly falling, while the euro–U.S. dollar pair is trading dangerously close to the 1.17 level,” Alor Broker’s senior analyst Alexei Antonov said.

On Tuesday, the Russian stock market grew with oil majors Rosneft and Lukoil being the major drivers of the benchmark as the shares reacted to an upward rebound of oil prices and the government’s decision not to ban gasoline exports, Antonov said.

But the oil sector is unlikely to continue rising, as the oil price is unable to steady itself above U.S. $70 per barrel, while the U.S. Department of Energy expects the oil price to fall to $66 next year due to surplus of offer emerging already in January–March 2022, so there are no reasons for the sector to grow faster than expected, he said.

Andrei Kochetkov, leading analyst for global research at Otkritie Broker, also said that the background for the Russian market was neutral on Wednesday morning as Asian markets were mostly in the green zone, while commodity prices were mainly falling.

“The market has climbed close to important mid-term resistance levels of 3,870 of the MOEX Russia Index, and overcoming of the level may speed up the mid-term growth momentum. At the same time, there is a threat of a downward correction from the current levels if there is a lack of fundamental growth factors,” Veles Capital’s analyst Yelena Kozhukhova said.

The increase of oil prices on Tuesday was only an upward correction, so the price may stop growing already on Wednesday, she said.

The key event of the day is the U.S. release of data on consumer inflation. The market expects prices to slow down their growth, which would lessen the necessity of the Federal Reserve System to toughen its monetary policy, but would also show that momentum of the economic recovery has wound down, Kozhukhova said.

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