Slide in oil prices, negative environment push Russian stocks down

MOSCOW, Sep 27 (PRIME) -- Russian stocks decreased on Tuesday following a fall in oil prices as investors stopped believing in positive results of the OPEC meeting in Algeria, while negative dynamics of European stocks on the background of a possible crisis in the banking sector only added fuel to the fire, analysts said.

The MICEX fell 1.12% to 1,975.52 and the RTS decreased 1.38% to 973.18.

“The meeting of OPEC members, results of which are highly expected, may once again result only in talks and not to lead to any agreement on a freeze or a cut of production. Iran still wants to raise its share in OPEC’s production (by at least 400,000 barrels per day), while Russia and the UAE are ready only to freeze production at current ‘record high’ levels,” Sofya Kirsanova, an analyst at managing company Raiffeisen Capital, said.

Given the mood of participants of the meeting, chances of a compromise in the sector are low, Kirsanova said.

The Brent oil price declined 2.756% to U.S. $46.08 per barrel as of 5.52 p.m. Moscow time, according to the ICE exchange.

“Hopes for an agreement in Algeria are vanishing, which drags the oil price down. Concerns regarding the banking crisis in Europe also do not prompt any wishes to buy shares, as risky assets will be the first to plunge. Almost every sector of the Russian market is under pressure,” Andrei Kochetkov, an analyst at Otkritie Broker, said.

The fall of European stocks continued, as capitalization of troubled Deutsche Bank AG continued to contract after the bank denied requesting help from Germany’s authorities, while another German bank, Commerzbank AG, announced plans to fire 9,000 people and suspend payments of dividends, Kochetkov said.

Vitaly Manzhos, a senior analyst at Bank Obrazovanie, said that shares of metals giant Norilsk Nickel outperformed the market and increased 1.17% to 9,780 rubles on the news that the Philippines suspended operation of 20 nickel mines due to ecological reasons, which may act as a stimulus for growth of nickel prices in the mid-term.

Coal producer Raspadskaya lost 6.81% to 55.54 rubles, while common and preferred shares of metals and mining group Mechel fell 4.05% to 87.99 rubles and 2.97% to 73.59 rubles, respectively. The shares fell in correction after yesterday’s growth against a falling market because of improvement of the mid-term pricing condition of the world coking coal market, Manzhos said.

Below are the MICEX’ five most active stocks on Tuesday:

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	-1.05	147.53	5.999
Gazprom	-0.99	133.92	3.243
Rosneft	-2.67	341.00	2.136
Lukoil	-1.05	3028.00	1.919
Norilsk Nickel	+1.17	9780.00	1.611

(64.1506 rubles – U.S. $1)

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