Russian stocks to pare losses as Chinese cbank eases policies

MOSCOW, Aug 26 (PRIME) -- The Russian stock market will increase at the session’s opening on Wednesday, recovering after the recent losses as investors are calmed by interest rates reduction by the Chinese central bank, while oil is also rebounding from its lows, analysts said.

“In the conditions of an improved foreign background, the Russian stock market will most probably continue to recover after losses it had last week,” Oleg Shagov, head of analytical department at investment company Solid, said.

The MICEX is expected to open at about 1,670; and the closest support levels will be 1,680–1,690, while the resistance zone is at 1,680–1,690, Vitaly Manzhos, a senior analyst at Bank Obrazovanie, said. The RTS will continue rising, Olma’s senior analyst Anton Startsev said.

The measures of China’s central bank to ease monetary policies had a calming effect on investors, he said. As the result, Asian markets opened in a positive territory and U.S. stock market futures are going up in the morning, Shagov said.

Brent rose 0.69% to U.S. $43.51 per barrel at 8.51 a.m., Moscow time.

Investors will wait for the U.S. oil reserves data release at 5.30 p.m., Moscow time, Startsev said.

The dynamics of U.S. Federal Reserve System (Fed) Funds futures demonstrates that the market expectations of chances that the Fed will raise the interest rate on September 16 fell to 30% from 50%, Nord Capital’s chief analyst Vladimir Rozhankovsky said.

The stock market turbulence will remain in Russia, and strong dynamics will be possible later on Wednesday on the back of events and news, Shagov said.

Sberbank will post a financial report for January–June under International Financial Reporting Standards (IFRS), which will be a milestone on the corporate stage, Startsev said.

Magnit will also publish January–June IFRS results. The boards of directors of Cherkizovo, Tatneft and UC RUSAL will hold meetings, and Russian traders will wait for statements, Anna Ustinova, KIT Finance Broker analyst, said.

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