Russian stocks to rise thanks to Fed’s unlimited buyback, oil prices

MOSCOW, Mar 24 (PRIME) – The Russian stocks are likely to grow on Tuesday morning supported by the Monday announcement of an unlimited asset buyback by the U.S. Federal Reserve System (Fed) and a slight increase of oil prices, analysts said.

“Today the RTS index may increase at the beginning of trade. The global markets have improved in general following the Fed announcement of an unlimited asset buyback, and the news on lifting total quarantine in China’s Wuhan on April 5,” investment company Olma’s senior analyst Anton Startsev said.

However, there is news on a speedier expansion of new COVID-19 cases and the U.K. Prime Minister Boris Johnson’s order for all British people to stay home, Startsev said.

Yelena Kozhukhova, analyst at Veles Capital, said that the MOEX Russia and the RTS Index did not fall too deeply on Monday to rule out an increase later in the week.

Contraction of the international stock and commodity markets was much smaller on Monday compared with the slumps of previous weeks, and the new Fed measures will support the markets in the medium term, she said.

“Today, the futures for the (U.S.) markets edge up by less than 3%, and oil is also in the green as it is trading close to U.S. $28 per barrel. That’s why we expect a positive opening of trade in the Moscow Exchange’s stock sector with a growth of about 2–3%,” Alor Broker’s analyst Alexei Antonov said.

The Brent oil price gained 3.92% to $28.09 per barrel as of 9.11 a.m. Moscow time, according to the ICE exchange.

“Nevertheless, there is no certainty that the rebound will continue further. We have already seen several times that Fed’s market support measures had only a short-term positive impact that didn’t lead to a start of full-scale market recovery or to at least a 10% technical rebound,” Antonov said.

End