Russian stocks to open flat on neutral foreign background

MOSCOW, Jul 22 (PRIME) -- The stock market is likely to start Thursday’s trade flat as the external background provides neutral signals, though gas giant Gazprom may jump on the news that the U.S. and German allowed Russia to finish the Nord Stream 2 pipeline, analysts said.

“We expect the MOEX Russia Index to open with a moderate change within 0.1–0.3% in the range of 3,710–3,730. The levels of 3,700 and 3,680 will act as the closest resistance, while 3,740 and 3,750 will become the closest support. After an almost-neutral start of the day, the MOEX Russia Index is very likely to switch to consolidation as uncertainty of the external background in the morning supports that,” Vitaly Manzhos, senior risk manager at Algo Capital, said.

The futures for the U.S. indices firm by 0.1%, while the Brent oil price fell by 0.2% after the Wednesday jump. The gold futures lost 0.2%. The Chinese index Shanghai Composite gained 0.3%, while the stock market of Japan was closed. All these makes the background for the Russian market close to neutral, which means that the national bourse will start the day with insignificant changes, Manzhos said.

Alor Broker analyst Alexei Antonov agreed saying if the situation on the Western bourses does not improve swiftly, it will be very tough for the Russian market to continue its Wednesday rebound.

“We should note the final clarification of the issue with the Nord Stream 2 among the positive moments. Germany and the U.S. struck the deal! This fact boosted Gazprom by 2%. We think that Gazprom will not stop with that, and may even achieve the threshold of 300 rubles per share even if the MOEX Russia Index continues moving sideways,” Antonov said.

Other important corporate events include April–June reports that Magnitogorsk Iron and Steel Works (MMK) and steelmaker Novolipetsk Steel (NLMK) are to publish. It is possible that some players will start selling the shares to take profit, but the securities should not fall significantly as mid-term investors are not going to sell them as long as the quarterly dividend yield on them is above 4%, Antonov added.

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