Russian stocks to open lower on unfavorable background

MOSCOW, Sep 29 (PRIME) -- Russian stocks are likely to fall at the opening of trading on Tuesday as external background offers negative drivers galore, analysts said.

“The influence of all key factors which impact significantly the Russian stock market dynamics, is moderately negative at the beginning of the day, according to our estimations,” Oleg Shagov, a head of investment company Solid’s analytical department, said.

The Brent oil futures fell to below U.S. $48 per barrel, U.S. stock index futures are edging down and Asian floors are mainly falling, Shagov said.

“We expect the Russian stock market to open close to 1,615 points of the MICEX index and a falling RTS index and expect the MICEX index to fall below its monthly lows under a unfavorable external background,” he added.

A deeper downward correction is possible at the start of the day, Anton Startsev, a senior analyst at investment company Olma, said, adding that Glencore’s Monday fall pushed down not only mining companies, but world markets in general, as investors’ appetite for risk shrank.

“The talks of the Russian and U.S. presidents may in fact be considered as a positive event, but they brought no news which could have invigorated the market,” Startsev added.

In the first few minutes of trading, the MICEX may fall 0.4% to 1,610 points, with 1,600 and 1,580 being support levels and 1,625 and 1,640 acting as resistance for the index, Vitaly Manzhos, a senior analyst at Bank Obrazovanie, said.

The latest scandal over Volkswagen’s ecological problems show that any company, even a very large issuer, may have unexpected serious problems, and such events may affect industries on the world scale, as it decreases investors’ appetite for risk, and Russian assets are usually regarded as risky, Manzhos said.

Investors will also watch for the release of the U.S. and the E.U. consumer confidence indices and Germany’s consumer price index.

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