Stocks may open mixed on unfavorable environment, oil prices

MOSCOW, Jan 29 (PRIME) -- Russian stocks are likely to open mixed at the start of trading on Tuesday as an unfavorable environment reduces investor risk appetite, while oil prices provide no clear signals to investors, analysts said.

“Today, a downward correction of the RTS Index may become slightly deeper as it will follow the global indices. Demand for risk on the global markets shrunk after Caterpillar published a weak financial report, which reminded traders of a negative impact of trade wars on the producing sector of the economy,” Olma’s senior analyst Anton Startsev said.

The latest round of charges pressed by Washington against China’s Huawei may significantly hurt trade negotiations between the two countries, Startsev said.

“We expect the MOEX Russia Index to open with an insignificant change within 0.3% at around 2,470–2,485. The levels of 2,460 and 2,450 will act as the closes support, while 2,490 and 2,500 will become resistance. The MOEX Russia Index may switch into a consolidation mode after a neutral start of the day waiting for new significant stimuli due to the impact of an unclear external background,” Algo Capital’s senior risk manager Vitaly Manzhos said.

The background is mixed as the U.S. stock index futures fell 0.5%, the Brent oil price gained about 0.3%, the gold futures are fluctuating around a zero point, Japan’s Nikkei225 edged up but Hong Kong’s Hang Seng lost 0.2%, Manzhos said.

“I expect mixed dynamics (at opening). The oil price fell below U.S. $60 per barrel (on Monday). Taking into account the U.S. statistics, is may serve as a reason for an up to 2% downward correction of the oil and gas sector,” Grigory Vashchenko, head of the department for trade operations on the Russian stock market at investment company Freedom Finance, said.

Startsev also said that investors will track releases of Western companies, including Pfizer and Verizon, while the British parliament’s vote on the Brexit format will also be of interest albeit its results will be published after the Moscow Exchange finished the main trading session.

Manzhos said that the release of the U.S. January consumer confidence index may also provide a guidance for traders.

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