Stocks to fall on weak foreign bourses, reaction to Navalny case

MOSCOW, Feb 4 (PRIME) – The Russian stocks are likely to contract on Thursday morning as expected Western reaction of imprisonment of politician Alexei Navalny  and falling foreign bourses weigh upon the national market, analysts said.

“On Thursday, February 4, the background for trade on the national market is negative. As of 8.28 a.m. Moscow time, the futures for the U.S. index S&P500 are in the red zone and fall by 0.23%, while the futures for Germany’s DAX lose 0.31%,” Ivan Semchenkov, analyst at investment company Finam, said.

Alor Broker senior analyst Alexei Antonov also said that the background was negative, as prices for almost all commercial and precious metals fell as well. “This is why we expect the start of trading to be in the red zone, and that the MOEX Russia Index may test the strength of support of the 3,300 level if the external background worsens,” he said.

“Political risks still exert serious pressure on the Russian market, including reaction of the West to the court’s decision in Alexei Navalny’s case. It signals that Russia’s relations with foreign countries will worsen again triggering an outflow of foreign money from ruble-denominated assets.”

Even the ruble should fall hit by a general decrease in investor risk appetite, by Navalny’s case, and a rising U.S. dollar, Antonov added.

Semchenkov also said that there will be lot of important news to drive the market -- the U.K. central bank is to decide on its interest rate, while the U.S. is to release weekly jobless claims. At home, Severstal, grocery chain Magnit, and national flagship carrier Aeroflot will release financial reports for October–December and 2020, he said.

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