Stocks can fall at opening as US–China trade deal priced in

MOSCOW, Jan 15 (PRIME) -- The Russian stock market will likely open lower on Wednesday following the falling foreign markets as the global investors hope no more for a significant impact of a U.S.-China trade agreement to take place later in the day, analysts said.

“The external background has been moderately negative since morning: the American futures fall 0.1%, the Asian markets demonstrate solid losses. That’s why we expect opening of our market with an up to 0.3% decline,” Alor Broker’s analyst Alexei Antonov said.

Sergei Drozdov, analyst at investment company Finam, said that investors reacted moderately negatively to the news that the U.S. will consider revocation of the remaining duties on China no earlier than in 10 months, and that according to a report by Bloomberg, removal of the tariffs will depend on fulfillment of the first part of the agreement by China.

“This means that the trade war, in spite of the expected signing of a trade agreement between the largest world economies, is far from an end, and investors will most probably hear belligerent statements from (U.S. President Donald) Trump on China more than once until the end of the year, which will cause increased volatility on the global stock markets,” Drozdov said.

According to Drozdov, the support level for the MOEX Russia Index stands at 3,120 and 3,100. The resistance notch is 3,170. The local support level for the RTS index stands at 1,596 and 1,570, and resistance at 1,612–1,630.

Antonov said that an address by Russian President Vladimir Putin to the Federal Assembly, both chambers parliament, can trigger sales, like it did for several previous years. “This is why we expect continuation of a decrease of the Russian stock market which will be good for it in the end,” he said.

However, he said new investors’ money will curb the decline. “Besides, we have not seen an accelerated rise of Gazprom which is usually a sign of a change in the trend and a deep correction,” Antonov said.

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