Stocks seen flat on oil price volatility, fading virus fears

MOSCOW, Jan 31 (PRIME) -- The Russian stock market will likely open unchanged on Friday as the oil prices dipped and then recovered, and the worries about coronavirus were eased by the World Health Organization (WHO), analysts said.

“All other things being equal, the flight from risk can be over today, which, together with the oil price recovery from the lows will create conditions for new attempts at correction on the Russian market,” Gennady Nikolayev, expert at the Academy of Management of Finance and Investment, said.

Sergei Drozdov, analyst at investment company Finam said that oil prices fell on Thursday on fears that the virus can harm fuel demand significantly. Besides, according to the U.S. Energy Department, the crude reserves grew by 3.5 million barrels last week, which also contributed to the decline of the prices.

The WHO admitted that coronavirus is a global emergency but did not recommend international restrictions on the traffic of passengers and goods, which calmed investors a bit, Nikolayev said.

Investment company Olma’s senior analyst Anton Startsev said that according to preliminary data, the U.S. gross domestic product grew above expectations in October–December and Japan’s industrial output 1.3% in December against a 0.7% forecast, which are also positive factors for the market.

Drozdov put the support level for the MOEX Russia Index at 3,095 and 3,070. The resistance notch is 3,140. The local support level for the RTS index stands at 1,540, and resistance at 1,590.

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