Russian stocks to open flat waiting for Fed key rate decision

MOSCOW, Feb 1 (PRIME) -- Russian stocks are likely to open flat on Wednesday as investors will wait for the U.S. Federal Reserve System’s meeting on the monetary policy and the key rate, the first after Donald Trump became the U.S. president, later in the day, analysts said.

Timur Nigmatullin, an analyst at investment company Finam, said that the background prior to the opening of the Russian stock market is positive as major Asian floors are in the green zone due to releases of good local macro statistics, and U.S. stock index futures are also in the green zone.

“Despite the favorable environment, we expect flat dynamics of the MICEX index at the opening. The worsening of geopolitical risks continues to pressurize ruble-denominated risky assets,” Nigmatullin said, adding that the Fed is unlikely to raise the key rate before Trump discloses details of his economic program.

“We expect the Russian stock market to open in a 2,220 range of the MICEX index and suppose that the stock indicator will continue the day around current levels in expectation of the U.S. oil statistics and monetary decisions of the Federal Reserve System,” Oleg Shagov, head of investment company Solid research department, said.

Shagov also said that investors will follow macro statistics during the day, including purchasing managers’ index in manufacturing sectors of Russia, the Eurozone, the U.K. and the U.S.

But Anton Manayev, head of investment company Olma’s trade operations department, said that the downward correction of the RTS index may continue early in the day, but investors may use it to buy mid-term positions. “The current high dividend yield, falling inflation, a possible mid-term easing of sanctions may prompt buyers to be more active,” he said.

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