Russian stocks to open flat as background sends mixed signals

MOSCOW, Jun 21 (PRIME) -- The Russian stock market is likely to open close to flat on Monday as the external background favors sales at the beginning of trade, while the prices for oil and gold will support the local market, analysts said.

“We expect the MOEX Russia Index to open with a moderate change of 0.1–0.3% within the range of 3,790–3,810. The levels of 3,780 and 3,760 will act as the closest support while 3,820 and 3,840 will become the resistance. After opening with a moderate change, the MOEX Russia Index is likely to switch into consolidation. The closest significant level of 3,800 will act as a temporary point of attraction,” Vitaly Manzhos, senior risk manager at investment company Algo Capital, said.

The futures for the U.S. indices fell by 0.2–0.5% on Monday morning. The Shanghai Composite index of China lost 0.2%, while the Japanese index Nikkei 225 decreased by 3.5%. The Brent oil price gained 0.3% and the futures for gold rose by 0.2%. The background for the Russian market is negative in the morning, but the higher oil price creates conditions for the MOEX Russia Index to start the day with only a slight change, Manzhos said.

Foreign countries shouldn’t publish any important macro statistics this is why the market will track the oil prices and wait for opening of the U.S. stock market, he added.

But Alor Broker’s senior analyst Alexei Antonov said that the unfavorable external background may trigger sales at the start of trade on the Russian bourse.

“The additional negative factor for the national shares came from the reports about new sanctions from the U.S., but the sanctions are unlikely to be painful,” Antonov said.

 At the same time, rapid growth of the U.S. dollar has stopped, which may cause a further increase of prices for commercial metals and oil. Taking into account the existing dynamics of prices for oil, gold, and nickel, the Russian market may experience an upward rebound later in the day after a slight contraction at opening, he said.

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