Russian stocks to rise on US market rebound, high oil price

MOSCOW, Feb 18 (PRIME) – The Russian stocks are likely to firm at opening on Thursday as the investors will price in Wednesday’s rebound of the U.S. stock indices and the rise of the oil price, analysts said.

“The Russian stock market lost almost 1.7% during the main trading session (on Wednesday) in spite of the rising oil price,” Alor Broker senior analyst Alexei Antonov said.

“The U.S. indices demonstrated their deepest contraction of the day near the closing time for our market, but the U.S. indices rebounded at the end of the day. Today, the futures for the U.S. indices eased, this is why we expect the MOEX Russia Index to open with a slight growth.”

The lack of a positive reaction to the high oil prices is based on everyone’s understanding that the growth is only connected to weather anomalies in the U.S., and even investors on the foreign currency markets agree that the oil prices will remain that high only for a short period of time. As soon as it gets warmer, the U.S. oil producers will work to compensate their production shortfalls, Antonov said.

But Vitaly Manzhos, senior risk manager at investment company Algo Capital, said that the oil prices may support the local market at the beginning of the day.

“We expects the MOEX Russia Index to open with an increase of 0.2–0.7% in the range of 3,445–3,460. The levels of 3,430 and 3,410 will act as the closest support, while 3,480 and 3,500 will become the resistance. After a start of the day with a moderate increase, the MOEX Russia Index may stay in the green zone, because another morning renewal of long-term records in oil prices support that,” Manzhos said.

Georgy Vashchenko, head of the department for trade operations on the Russian stock market at Freedom Finance, said that investors would focus on the U.S. oil and oil product reserve data, on releases of other macro statistics, and on a financial report of oil company Gazprom Neft for 2020.

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