Russian stocks to open flat as background provides no drivers

MOSCOW, Oct 23 (PRIME) -- Russian stocks are likely to open close to flat on Monday as the external background and oil prices provide the market with no strong drivers for any kind of movement, analysts said.

“We expect the Russian stock market to open in a range of 2,075 of the MICEX index and suppose that the stock indicator will continue the day around the current levels looking for drivers to resume growth. The obstacle for the rising tendency of the stock indicator is resistance at around a psychologically important level of 2,100, while the support level lies at around 2,050–2,060,” Oleg Shagov, head of investment company Solid’s research department, said.

The ultimate influence of the key external factors for the Russian market is close to neutral at the beginning of the day, with oil prices changing insignificantly at around a U.S. $57.9 per barrel mark, the U.S. stock index futures showing no serious changes, and the Asian floors showing no common dynamics, Shagov said.

“Consolidation of the RTS index is possible in the short term, as the external background may be seen as neutral prior to the start of the trade. Still, technical analysis data leave a possibility for a deeper downward correction of the RTS index after the upward channel’s border line is closed,” Anton Startsev, a leading analyst at investment company Olma, said.

Vitaly Manzhos, a senior risk manager at investment company Nord Capital, said that strong October 20 dynamics of the U.S. stock indices will support the local market early on Monday, but the MICEX will still open with only a minor 0.2% increase around 2,075.

“The levels of 2,070 and 2,060 will act as support, while 2,080 and 2,090 will act as resistance,” Manzhos said.

“After a moderately positive start of the day, the MICEX index is likely to switch to consolidation. The local market has no strong incentive for a large-scale one-way movement.”

Shagov also said that local investors will track releases of operating results of uncut diamond mining giant ALROSA, children’s goods retailer Detsky Mir, and of January–September financial results of power utility Unipro calculated under Russian Accounting Standards (RAS).

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