Russian stocks to open flat as oil prices rise, Chinese stocks fall

MOSCOW, Jul 6 (PRIME) -- The Russian stock market is likely to open in a neutral way on Tuesday under a mixed impact from the rising oil prices and falling Chinese indices, analysts said.

“We expect the MOEX Russia Index to open with a moderate change of 0.1–0.3% in the range of 3,870-3,890. The levels of 3,860 and 3,850 will act as the closest support, while 3,900 and 3,920 will act as significant resistance. After a moderate movement at the opening, the MOEX Russia Index is likely to switch into consolidation prompted by the uncertain condition of the external background,” Algo Capital senior risk manager Vitaly Manzhos said.

The background sends mixed signals as the oil prices and gold futures rise, but China’s Shanghai Composite index lost 0.8%, while Japan’s Nikkei225 index gained 0.3%, Manzhos said.

Georgy Vashchenko, head of Freedom Finance’s department for trade operations on the Russian stock market, also expected the Russian market to start the day with mixed dynamics.

“The movements on the Chinese market and reaction of the main trade floors to the events in China will be priced in. The securities of the oil and gas segment will outperform the market. … The MOEX Russia Index guidance is 3,850–3,900,” Vashchenko said.

Oil trades above U.S. $77 per barrel. The OPEC+ alliance has failed to agree on further parameters of the deal and the ministerial meeting was cancelled. As oil consumption is rising, the upward trend in oil prices is very likely to continue in the next several weeks, he said.

But Alor Broker’s senior analyst Alexei Antonov said the Russian shares are very likely to price in the growth of oil prices at the beginning of the day.

“On Monday, the Russian market managed to gain slightly more than 0.4%, but we can call this growth modest since the oil prices jumped above U.S. $77 per barrel. It could have possibly happened due to low activity of foreigners as the U.S. stock markets were closed yesterday. We expect purchases in Russian shares to continue today, including in the shares of Lukoil and Rosneft that failed to react to the growth of prices for ‘black gold’ yesterday,” Antonov said.

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