Stocks to continue falling on Ukraine woes, foreign markets fall

MOSCOW, Jan 25 (PRIME) -- The Russian stock market is likely to start the main trading session on Tuesday lower on mounting international nervousness about alleged Russian military buildup on the Ukrainian border and falling foreign markets, analysts said.

“Speaking of the mood of the international markets on Tuesday morning, we can call it negative. The leading Asian indices lose up to 2.7%, and the futures for the main U.S. indices lose up to 1.2%,” Bogdan Zvarich, senior analyst at financial supermarket Banki.ru, said.

“The closest futures for the Brent oil tries to regain some ground this morning by adding 0.8% and staying slightly below U.S. $87 per barrel.”

The MOEX Russia Index plunged by 5.9% on Monday on pressure of the geopolitical factor, and the external background on Tuesday morning provokes expectation of continuing sales of Russian shares. The Russian shares are oversold, but there is no reason for them to grow now, Zvarich said.

Alor Broker senior analyst Alexei Antonov called yesterday’s trading a Black Monday, as the MOEX Russia Index lost over 8% during the day on nearly record volumes.

“The reason for the ongoing sales is the same – mounting political hysteria around ‘an impending’ Russian invasion of Ukraine,” Antonov said.

“We have to say that this threat looks justified. The Western mass media talk about Russian military buildup on the border with Ukraine, while our media report relocation of military troops by Kyiv close to the borders with the Donetsk and Luhansk self-proclaimed republics.”

Ukraine can create provocation any moment, this is why withdrawal from the Russian assets seems sensible. Also, the situation on the U.S. stock market had worsened, and it looks like the market is at a start of a mid-term downward trend, not a mere correction, he said.

“The MOEX Russia Index is technically oversold, and it is close to a strong support level of 3,100, which will limit possible sales at a time when an upward rebound is brewing. But these projects may be shattered in a second by new negative political news,” Antonov added.

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