Russian stocks to open higher as Fed downgrades economic outlook

MOSCOW, Mar 19 (PRIME) -- Russian stocks are likely to open higher on Thursday following a rise of international markets after the U.S. Federal Reserve’s (Fed) late Wednesday moved a step closer to hiking rates for the first time since 2006, but downgraded its economic growth and inflation projections, analysts said.

“A rise is still possible, as the easing of tension over the Fed’s monetary policy has not been fully priced in our stocks. As expected, the phrase about patience regarding rates has vanished from the Fed’s comment, but the mention of an economic slowdown appeared, which is seen as a point against increasing rates,” Olma’s senior analyst Anton Startsev said.

The general background prior to the Russian market’s opening is positive with U.S. stock index futures rising and Asian floors showing mostly positive dynamics. The Brent oil price is losing 0.74% to U.S. $55.5 per barrel as of 9.16 a.m. Moscow time, according to the ICE exchange, in a slight correction after rising to over $56 per barrel on late Wednesday.

“We expect the market to open with a significant increase of about 1-1.5% to 1,650-1,655 points of the MICEX index. In the first few minutes of trade the local market will react to the rise of the RTS index futures and the blue chips due to the improvement on the oil market,” Vitaly Manzhos, analyst at Nord Capital, said.

He said that during the day the MICEX index may rise to 1,660-1,670 points.

Investors will track today a meeting of the E.U. leaders, who will discuss the situation in Ukraine and relations with Russia. On Wednesday, U.S. President Barack Obama and German Chancellor Angela Merkel agreed that the anti-Russian sanctions will be kept until the Minsk agreements are fully implemented.

U.S. jobless claims will also be in the focus of investors’ attention today.

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