Stocks rise backed by rising oil prices, favorable environment

MOSCOW, Feb 1 (PRIME) -- Russian stocks grew on Thursday in line with rising oil prices and advancing foreign trading floors, analysts said.

The MOEX Russia Index rose 0.55% to 2,302.57 and the RTS increased 0.84% to 1,293.10.

“Investor mood was supported by higher oil prices and a positive external background. Oil prices have again rocketed to U.S. $70 per barrel in spite of yesterday’s report of the U.S. Energy Department showing an increase of reserves above the American Petroleum institute’s estimates,” Sofya Kirsanova, an analyst at managing company Raiffeisen Capital, said.

She said that oil bulls could not have been stopped even by U.S. oil output increase by 41,000 barrels to over 9.9 million barrels per day.

“It is evident that markets don’t want to acknowledge negative news, and that investors think that higher demand for oil coupled with expectations of a quicker world’s economic growth supported by Caixin’s data on China’s Purchasing Managers’ Index – will absorb the higher supply from the U.S. completely,” Kirsanova said.

Igor Kovalyov, an analyst at InstaForex group of companies, said that the local market was supported by a favorable external background during the day. “Asia traded mixed but showed mostly positive dynamics. Europe traded in the green zone during the day. Further growth of the Brent prices supported national benchmarks,” he said.

Andrei Kochetkov, an analyst at Otkritie Broker, said that common shares of Russia’s top bank Sberbank reached their historical record of 270.30 per paper during the day, but finished the trade with a 0.49% contraction to 263.20 rubles.

“But fundamental factors show that Sberbank is significantly more expensive than the market, with the price to earnings ratio standing above 8 and dividend yield getting close to 2.2%,” Kochtekov said.

Kirsanova also said that steelmakers Severstal and Novolipetsk Steel (NLMK) were among the leaders growing 2.47% to 941.80 rubles and 2.31% to 150.40 rubles, respectively. Prices for rolled steel were high in October–December 2017, so investors expect Severstal to publish strong financial results on Friday that will translate into high dividends. Both companies work on the same market, and investors expect good results from NLMK as well, Kirsanova said.

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

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	-0.49	263.20	19.395
Gazprom	+1.42	145.39	5.434
Magnit	-2.08	5219.00	3.477
Norilsk Nickel	+0.27	11639.00	2.013
Lukoil	+0.87	3760.50	1.900

(56.1840 rubles – U.S. $1)

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