Russian stocks to open flat in thin trade due to US holiday

MOSCOW, Jan 16 (PRIME) -- Russian stocks are likely to open close to flat on Monday due to a neutral external background and a low investment activity of foreign investors due to celebrations of the Martin Luther King Day in the U.S., analysts said.

“We expect the Russian stock market to open within a range of 2,190–2,195 of the MICEX index and suppose that the stock indicator will remain close to the current levels as investment activity will be low due to a holiday in the U.S.,” Oleg Shagov, head of investment company Solid’s research department, said.

The Brent oil price rose 0.234% to U.S. $55.58 per barrel as of 9.05 a.m. Moscow time, according to the ICE exchange. Shagov attributed the increase to the U.S. data that showed a contraction in operating drilling rigs in the country.

The background prior to the opening of the Russian stock market is neutral, taking into account the oil price dynamics, a slight contraction of the U.S. stock index futures, and the fall if major Asian floors. The European session’s premarket indicates moderate and mixed changes of major European bourses at the beginning of the day, Shagov said.

“Today contraction of the RTS index may continue. But the Friday trading closure showed that the activity of buyers has increased. The current levels are very attractive for mid-term purchases,” Anton Manayev, head of the trade operations department of investment company OLMA, said.

“We think that there is a possibility for the MICEX index to rebound to the closest support level of 2,210 at the beginning of the week, while the closes level of support if 2,140–2,160,” Promsvyazbank said in a research note.

But Timur Nigmatullin, an analyst at investment company Finam, said that the external background may be described as negative as Asian floors are falling and oil prices are under pressure despite the increase.

“On the one hand, the U.S. dollar index has stopped falling after the U.S. Federal Reserve System’s meeting…Statistics is also not pleasing. The U.S. Energy Information Administration’s data last week showed a 4.1 million barrel increase of crude oil reserves, while production rose by 176,000 barrels,” he said.

Shagov also added that during the day, the release of Russia’s trade balance data and budget deficit figures may have an impact on the market.

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