MOSCOW, Mar 10 (PRIME) – The Russian stocks are to slump at opening on Tuesday as the market players will price in the Monday’s oil price dip and contraction of all other foreign bourses, analysts said.
“Today, the Russian stock indices are to open in the red. Over the weekend, the reports emerged saying that Saudi Arabia was ready to provide discounts to oil consumers and to raise its oil production, which led to a 24% fall in the futures for the Brent oil on Monday and to an increase of volatility at markets in general,” investment company Olma’s senior analyst Anton Startsev said.
“Traders on the Russian market will have to price in yesterday’s worsening of the external background at the beginning of trade, but the market can stabilize later in the day as the current situation on the external markets favors that. For instance, the Brent oil price has gained about 8% today.”
Investment company Finam’s analyst Sergei Drozdov said that the MOEX Russia Index may fall close to 2,500 following yesterday’s 8–22% contraction of shares of Russian companies in London.
Georgy Vashchenko, head of the investment company Freedom Finance’s department for trade operations on the Russian stock market, said that the Russian market may experience a 5% fall at the opening of trade. “Volatility will be high, dynamics depend on the movements of the external bourses,” he said.
“The major reason for yesterday’s slump was Russia’s Friday decision to destroy the OPEC+ cartel. The reason for such a tough stance is unclear, but the moment for the price wars was chosen badly as the world was already suffering from an oversupply of oil and from fears of a slowdown of the global economy due to the coronavirus,” Alor Broker’s analyst Alexei Antonov said.
“We will open today with a 10–20% fall, and shares of oil companies, excluding Surgutneftegas, may lose even more. The contraction will also be fueled by mandatory closure of positions by brokers. Today will be a hard day for a broker.”
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