Stocks may fall as negative environment favors no purchases

MOSCOW, Aug 23 (PRIME) -- Russian stocks are likely to contract on Thursday morning as the negative external background favors no purchases in local shares, analysts said.

“The external background worsened on Thursday due to several reasons. First, the minutes of the Federal Reserve System proved the regulator’s intent to raise rates in September, this is why the U.S. stock indices S&P500 and Dow stopped their streak of positive closures. The focus of investors switched to the summit of central bank chairmen in Jackson Hole,” Anastasia Sosnova, an analyst at investment company Freedom Finance, said.

The Chinese government introduced 25% import duties on U.S. $16 billion worth of goods from the U.S. in a new twist of a trade conflict between the countries. The Asian floors were in the red zone early in the day, Sosnova said.

“Speaking of the Russian market, the fact of introduction of sanctions means no significant worsening of the market’s condition, as investors have already priced in the sanctions. But the moderately negative external background may become an additional obstacle for purchases resumption at the market,” she said.

Anton Startsev, a senior analyst at investment company Olma, said that the U.S. dollar started to grow at the global currency markets prior to the Jackson Hole meeting curbing demand at the stock markets of emerging countries.

“The external background is negative before the start of trade, as oil prices slid from their highest levels of yesterday’s trade, the futures for the U.S. stock indices lose about 0.15%, and prices for metals fall in reaction to strengthening of the U.S. dollar. Given the background, the MOEX Russia Index is likely to retract to 2,270, and it may fall even lower if the mood of investors worsens,” Alexei Antonov, an analyst at Alor Broker, said.

The Brent oil price fell 0.241% to U.S. $74.60 per barrel as of 8.55 a.m. Moscow time, according to the ICE exchange.

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