Russian stocks to rise at opening as govt resignation seen neutral

MOSCOW, Jan 16 (PRIME) – The Russian stocks are likely to rise at Thursday’s opening on signing of the first stage of the U.S.–China trade deal with the Wednesday’s government resignation already priced in, analysts said.

“Although formation of a new government is far away, and who gets which powers is also unknown, the market and the currency that reacted in a moderately passionate way to the news, quickly returned to their previous levels even before the announcement of a new prime minister. It is obvious that investors understand that no serious changes should be expected,” Alexei Korenev, analyst at investment company Finam, said.

“Speaking of international news, the main event here is signing of Phase 1 of a trade deal by Beijing and Washington,” Korenev said, adding that the European markets closed too early to react to the news, while the U.S. markets firmed on the news.

The market will focus on the news about the new government and corporate reports. “One should expect a moderately positive opening of the Russian stocks,” he said.

“The external background is positive this morning, as the U.S. stock index futures grow by about 0.25%, and the oil prices grow slightly faster. That is why we expect a moderately positive opening with a growth of about 0.2%,” Alor Broker’s analyst Alexei Antonov said.

The Brent oil price gained 0.77% to U.S. $64.49 per barrel as of 9.02 a.m. Moscow time, according to the ICE exchange.

Georgy Vashchenko, head of the department for trade operations on the Russian stock market at investment company Freedom Finance, also said that resignation of the government did not cause any strong reaction from the market.

“The framework of the reforms was defined rather clearly. The address to parliament and changes in the cabinet bear no negative signals for the businesses…People expect reforms in the social sphere from the government, and additional state spending will raise incomes of households and stimulate consumption in the first place,” Vashchenko said.

“We expect the growth within 1.5% (today),” he said.

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