Russian stocks to open flat on neutral environment, no drivers

MOSCOW, May 28 (PRIME) -- The Russian stock market will open nearly flat on Thursday because there are no significant drivers for strong dynamics amid a neutral external background, analysts said.

“We expect that the opening of the Russian stock market trading session will see insignificant changes. A resistance level of 1,670–1,680 is still a barrier for the MICEX's new growth wave,” Oleg Shagov, senior analyst at investment company Solid, said.

The background prior to the opening of the trading session is mixed with the U.S. stock indices futures changing insignificantly after the stocks grew on Wednesday. Asian floors showed no single dynamics and the Brent oil price rose 0.76% to U.S. $62.53 per barrel as of 8.39 a.m. Moscow time, after falling to $62.06 on Wednesday from $63.72 as of Tuesday.

“The Russian stock market will open flat. The growth of the U.S. stock indices and a slight retraction of oil prices will ensure a neutral opening of the trading session,” Denis Khripushin, analyst at 2trade.ru, said.

There may be as well a mixed opening of the market. “A further decrease of the oil price prompts a steady decrease in the ruble exchange rate, which hurts the dynamics of the RTS index, but is somewhat positive for the MICEX index,” Promsvyabank’s analysts Ilya Frolov and Yevgeny Loktyukhov said.

“Thus, we may see a downward correction of the RTS close to 1,000 points during Thursday and Friday, while the MICEX is likely to keep a moderately positive sentiment with local goals close to 1,680 points,” Frolov and Loktyukhov said.

Domestic corporate news may have a significant impact on trade in Russian stocks today, including the biggest bank Sberbank’s report for January–March, in which the bank is likely to show a significant decrease of the net profit, and a meeting of oil pipeline monopoly Transneft’s board of directors which may give a recommendation on dividends for 2014 and may indicate future dividend policies, Solid’s Shagov said.

Investors will also closely watch for releases of external macroeconomic data during the day, including the U.K. gross domestic product figures for January–March and the U.S. unemployment, new jobless claims and unfinished housing sales.

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