Stocks seen opening flat ahead of central bank board meeting

MOSCOW, Oct 25 (PRIME) -- The Russian stock market will likely open neutrally on Friday, as the outcome of a forthcoming meeting of the board of directors of the central bank are unclear, analysts said.

“The external conditions continue to be quite neutral,” Promsvyazbank senior analyst Mikhail Poddubsky said. “The results of a meeting of the Russian central bank, which are unclear for the first time in many months -- whether the decrease will be by 25 or 50 basis points. It will have a great influence on all Russian assets.”

According to Finam analyst Sergei Drozdov, the Russian central bank will likely reduce the key rate by 0.25 percentage points.

“The central bank can confidently fall into step with its foreign colleagues now, taking into account the extremely low inflation and state debt as well as a high level of foreign currency and gold reserves,” he said.

“Nevertheless, I think, markets have taken the words of the chairwoman about a more aggressive key rate reduction too literally, pricing in its fall by 50 basis points.”

Poddubsky said that a moderate key rate cut will likely be followed by a downward correction of the market.

Drozdov said that the support level for the MOEX Russia Index stands at 2,855 and 2,840. The resistance notch is 2,900. The local support level for the RTS index stands at 1,390 and 1,370, and resistance at 1,141 and 1,430.

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