Russian stocks to open flat, trade to be thin due to US holiday

MOSCOW, Jul 4 (PRIME) -- The Russian stocks are likely to open flat on Friday and volumes will be thin due to Independent Day celebrations in the U.S., analysts said.

“A lull is possible today on the market as non-resident activity may be low due to the holiday in the U.S.,” Alexei Bystrov, Olma’s deputy CEO, said.

On Thursday, the U.S. indices grew 0.5-0.6%, but investors are still worried that the Federal Reserve may toughen the monetary policy as the unemployment rate fell to a historic low of 6.1% in June.

The background prior to the market opening is mixed with European floors closing in the green zone, Asian bourses showing no common dynamics and Brent oil prices decreasing to U.S. $110 per barrel on the back of a new agreement between the Libyan government and rebels, which signals the end of an oil crisis in the country.

“But the geopolitical situation remains the main driver for the market. The news on the situation in Ukraine can affect trading,” Bystrov said.

President Barack Obama consulted by phone on Friday with German Chancellor Angela Merkel and agreed to keep up the pressure on Russia to defuse the crisis in Ukraine or face more economic sanctions.

“The information war has escalated in recent days – there is information that Russia will launch a peacekeeping operation in the east of Ukraine in the next two days,” Andrei Vernikov, Zerich Capital deputy CEO, said.

“Escalation of an information war often precedes a ‘hot war’ and does not encourage investors.”

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