Stocks to fall at opening on fears of Russian invasion in Ukraine

MOSCOW, Nov 23 (PRIME) -- The stock market will start trading with a new contraction after Monday’s sales as Western money flee on rumors about possible Russian invasion to Ukraine, analysts said.

“It was the foreign investors who started selling the ruble assets nervously as rumors and speculations about a possible start of Russian military actions in Ukraine strengthened,” Alor Broker senior analyst Alexei Antonov said.

“Still, we think that it was the reason that only led to serious profit taking. There are no drivers for the Russian market to grow. The commodity prices will not continue their rally as the U.S. Federal Reserve System switched to toughening the monetary policy, and the high key rate of the Russian central bank and expectations of a further increase deprived the market of support of high dividends and reduced the potential for economic growth.”

Anotnov said that on Tuesday morning, sales in the Russian shares will continue. The market closed near the intra-day low on Monday, which means that not all investors who wanted to sell have done so and the background for the market is negative.

“The external background is moderately negative in the morning. The U.S. indices fell after the closure of our previous trading session, and the Asian markets show mixed dynamics. The futures for the S&P 500 index fell,” Vasily Karpunin, head of department of information research analysis at BCS World of Investment, said.

“Taking into account the previous evening trading session, we can suppose that if the background does not change, the MOEX Russia Index will open below Monday’s closing.”

On Monday, the Russian market was the only emerging market with serious sales although the U.S. markets hit new record highs, and the Brent oil price gained 1%. A fall in the shares of exporters and the ruble, while commodities and Western bourses remain stable are usually caused by a serious outflow of foreign money possibly due to geopolitical concerns, Karpunin said.

The shares of Russian companies traded in the U.S. deepened their dive after the start of a trading session in the U.S., with internet giant Yandex, recruiting platform HeadHunter, and online marketplace Ozon being the loss leaders pointing to the fact that the sales mainly came from foreign investors. There were no serious negative corporate factors, Karpunin added.

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