Stocks to fall at opening as Chinese June retail data disappoints

MOSCOW, Jul 16 (PRIME) – The Russian stocks are likely to open lower on Thursday on market disappointment with the Chinese retail statistics for June, analysts said.

“Today the RTS Index is likely to open in the red zone under the influence of the external background, as the Chinese June retail data did not meet market expectations,” investment company Olma senior analyst Anton Startsev said.

“There are no significant reasons for the RTS Index to quit consolidation with the lower range at 1,200.”

The futures for the U.S. stock indices and the Asian floors contracted, Startsev said.

Alexei Korenev, analyst at investment company Finam, said that the Chinese macroeconomic statistics demonstrated the country’s noticeable recovery from the coronavirus pandemic, with fixed capital investment, gross domestic product, and industrial output outperforming expectations, while retail sales underperformed. Still, the majority of Asian bourses corrected downwards on Thursday morning, he said.

“The futures for major international indices fell moderately in the morning, as the stock markets still need to eliminate the overbought state they accumulated after a rise in the several previous days. … The most probable scenario is that the start of our trade will be below yesterday’s closing,” Korenev said.

Alor Broker senior analyst Alexei Antonov said that gas giant Gazprom fell by 5.9% on Wednesday on a dividend gap although its dividend yield stands at 7.8%, but it would be wrong to buy the shares on expectation of a rapid closure of the gap.

“The U.S. announced new sanctions against Nord Stream 2 and the TurkStream. Yes, Germany is also working on retaliation so that a small trade war would start, but it is possible that finishing construction will be paralyzed for some time again. Still, Gazprom’s problems lie not only in the ‘streams’, but in low demand and low prices for its product as well,” Antonov said.

Prospects for Gazprom will emerge only if the background improves significantly, which is not going to happen. Following a 0.9% growth of U.S. indices, the futures for the indices fell by about 0.5% in the morning. “This is why our market will open with a similar contraction,” he said.

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