Stocks to decrease on falling oil prices, US stock index futures

MOSCOW, Aug 29 (PRIME) -- The Russian stocks are likely to fall on Thursday morning as contraction of oil prices and the U.S. stock index futures favor sales at the beginning of the day, analysts said.

“Yesterday, the Russian stock market paid attention to the positive background and joined other global bourses, gaining 0.7% in the day. But it is too early to speak about recovery of an upward trend. We will likely see a gradual contraction today, and there are several reasons for that,” Alor Broker’s analyst Alexei Antonov said.

First, the oil price and U.S. stock index futures are sliding down from their yesterday’s highest points. Besides that, the ruble may rise today, he said.

“The Russian currency again lost against the U.S. dollar today, and closed with a 20 kopeck fall below the 67 ruble resistance level. There was no reason for this weakening except the end of the tax period. The Russian currency is very likely to reverse and grow today to above 66.5 rubles per U.S. dollar, which will play against the stock market and shares of exporters in the first place,” Antonov said.

Investment company Solid said in a research note that the background for the Russian stock market was neutral at the beginning of the day, but the key factors favored a weak start of the day.

The Brent oil price lost 0.649% to U.S. $60.10 per barrel as of 9.12 a.m. Moscow time, according to the ICE exchange.

“Mixed dynamics of Asian stocks and contraction of oil prices may lead to a weak opening of the Russian indices. U.S. stocks grew yesterday insignificantly before bouncing back from their local support levels, but the general news flow is still worrying. Risks of future correction persist,” the research note read.

No news comes from the U.S.–China trade dispute and it is highly possible that the two governments will not be able to change their decisions before September 1, when Washington and Beijing will have to raise import duties, Solid said.

But investment company Olma’s senior analyst Anton Startsev said that the Russian stock market may open neutrally.

“There is no significant reason for the current consolidation of the RTS Index to finish. Traders of the global markets are waiting for the news about trade dialogue between the U.S. and China and an adjusted estimate of the U.S. gross domestic product (GDP) for the second quarter to be published at 3.30 p.m. Moscow time,” he said.

Volatility of stock markets has started to decrease, but gold prices and the yield of U.S. treasuries still shows high demand for so-called defensive assets, Startsev said.

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