Russian stocks to rise as oil price rebounds to $85 per barrel

MOSCOW, Nov 29 (PRIME) -- The Russian stock market is likely to start Tuesday’s trading higher because the oil price jumped to around U.S. $85 per barrel, analysts said.

“The global stock bourses’ mood is positive on Tuesday morning. The markets are recovering after yesterday’s slump caused by worsening of investor appetite to the risky assets because of the coronavirus and protests in China,” Bogdan Zvarich, senior analyst at financial platform Banki.ru, said.

“The leading Asian bourses rise by up to 2.1% this morning … and the futures for the main U.S. indices gain 0.3%.”

Georgy Vashchenko, deputy director of the research department of Freedom Finance Global, said that the shares of oil and gas companies were likely to rebound following the oil price, and put the guidance for the MOEX Russia Index at 2,180–2,200.

The Brent oil futures contract with expiration in January stands at around $82 per barrel, he said.

“We still think that the current contraction (of the oil price) is unstable and that there are reasons for a price growth in the medium term. China is softening its coronavirus restrictions, OPEC is likely to maintain the current output, and exports from Russia are falling,” Vashchenko said.

Alor Broker’s senior analyst Alexei Antonov also expected the Russian shares to grow in line with the oil.

“Until a decision on Russian oil price cap is made -- the level of $62 is discussed now -- and as long as the OPEC+ alliance stays silent, the Russian oil sector will be vulnerable,” he said.

“On the other hand, the great dividend yield and the upcoming cut-offs in Lukoil and Gazprom Neft will prevent the oil sector’s securities from a deep fall, and an upward rally in the two securities is possible any moment.”

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