Stocks firm as China cuts rate, U.S. market rises, shrugs off oil fall

MOSCOW, Mar 30 (PRIME) – The Russian stocks edged up on Monday in spite of a record oil price contraction as China softened its monetary policy, analysts said.

The MOEX Russia Index rose 1.34% to 2,433.35 and the RTS increased 0.33% to 958.54.

“The futures for the U.S. stock indices changed their direction several times during the day from green into red and back. One of the strongest growth factors was the news that Beijing followed other countries’ suit in softening the monetary policy,” Valery Yemelyanov, analyst at investment company Freedom Finance, said.

“The People’s Bank of China unexpectedly reduced its 7-day repo rate to 2.2% from 2.4%...This reduction is the deepest for the past 5 years. It spurred the indices and futures for shares throughout the world.”

The U.S. market also started the day higher to price in a rapid growth in sales of property in February, which supported the Russian market, he said.

At the same time, the Russian market surprisingly ignored the oil price fall that started on March 27 and continued on Monday. It looks like the MOEX Russia Index has already priced in the negative contribution of low oil prices, and new negative factors will have to emerge to push it down, Yemelyanov said.

The May futures for the Brent oil plummeted by 11.95% to U.S. $21.95 per barrel as of 6.20 p.m. Moscow time, the lowest point since March 2002, according to the ICE exchange.

Andrei Kochetkov, senior analyst at Otkritie Broker, said that the Russian market started the day with a significant contraction in reaction to the plummeting oil prices.

“But in the middle of trade, futures for the U.S. stock indices started to grow. Moreover, the current levels of many shares remain attractive in the long term. It is also obvious that the regime of self-isolation is very good for the business of telecommunications companies,” Kochetkov said.

Mobile operator MTS and state-owned telecom company Rostelecom grew by 2.40% to 296.95 rubles and 5.25% to 70.72 rubles, respectively.

Kochetkov also said that the commodity and oil companies were among the loss leaders on the ongoing slump in global demand. Tatneft lost 1.55% to 521.80 rubles, Bashneft fell 0.83% to 1,499 rubles, and Gazprom Neft decreased by 1.02% to 287.05 rubles.

Below are the MOEX Russia Index’ five most active stocks on Monday:

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	+1.45	183.00	16.984
Rosneft	-0.59	301.00	9.078
Gazprom	+1.11	176.44	8.377
Lukoil	+0.65	4459.00	7.593
Norilsk Nickel	+0.81	19462.00	5.506

(77.7325 rubles – U.S. $1)

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