Russian stocks to open flat on absence of strong drivers

MOSCOW, Sep 27 (PRIME) -- Russian stocks are likely to open neutrally on Wednesday as foreign floors and the background news flow provide it with no strong drivers for any kind of movement, analysts said.

“In the short term, a period of consolidation-correction is possible in the RTS index. The weakening of the U.S. dollar, which acted as a factor of support to demand on emerging markets, has stopped due to expectations that the U.S. Federal Reserve System will toughen its monetary policy and the announcement of a U.S. tax reform,” Anton Startsev, a leading analyst at investment company Olma, said.

Details of the reform will be disclosed on Wednesday evening after the trade in Russia stops, Startsev said.

Vitaly Manzhos, a senior risk-manager at investment company Nord Capital, said that the external background prior to the start of the trading session in Russia is moderately positive as the U.S. stock index futures are edging up, the Brent oil price increasing, and the Asian floors show mixed dynamics.

“We expect the market to open with an insignificant change in the MICEX index in a range of 2,070–2,075…The local market may switch to consolidation after a neutral start waiting for opening of the Western trade floors. The moderately positive external background does not prompt a noticeable increase of the MICEX and RTS indices,” Manzhos said.

Oleg Shagov, head of investment company Solid’s research department, said that investors will be cautious today especially in Asia as tensions around North Korea rise.

“We expect the Russian stock market to open close to yesterday’s closing level of the MICEX index of 2,071.1 and suppose that the stock indicator will continue the day around the level within its mid-term upward trend that was supported earlier by the MICEX reaching its semiannual record high,” Shagov said.

Startsev said that investors will also track the weekly release of the U.S. Department of Energy data on oil reserves at 5.30 p.m. Moscow time.

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