Stocks to open flat ahead of macroeconomic news, Powell’s speech

MOSCOW, Aug 27 (PRIME) – The Russian stocks are likely to open unchanged on Thursday as the market is wary ahead of releases of macroeconomic data and a statement by Jerome Powell, chairman of the U.S. Federal Reserve System, analysts said.

“Technical analysis does not allow us to expect the RTS Index to leave the consolidation stage. A lull is likely to happen in the first half of the day while investors will be waiting for the head of the U.S. Federal Reserve System to make a statement during an online summit. Moreover, the U.S. is to release an adjusted estimate of the gross domestic product contraction for the second quarter of the year at 3.30 p.m. Moscow time,” investment company Olma’s senior analyst Anton Startsev said.

The background is neutral for the market as the U.S. stock indices gained 0.3–1.7% on Wednesday, while futures for the indices fell on Thursday morning. The European floors closed in the green zone, while the Asian floors show no common dynamics, Starstev said.

“The external background is neutral prior to the start of trade in Russia. On the one hand, commodity prices are rising, on the other hand, many Asian floors are under pressure. Nevertheless, higher profits of Chinese companies points to better commodity demand. It is likely that the markets will be volatile mainly in the second half of the day due to the statement that Powell is to make,” Andrei Kochetkov, lead analyst at Otkritie Broker for global research, said.

The Brent oil price grew by 0.241% to U.S. $45.75 as of 9.15 a.m. Moscow time, according to the ICE exchange.

Veles Capital analyst Yelena Kozhukhova said that the MOEX Russia Index and the RTS Index grew on Wednesday but stayed below the closest resistance levels of 3,050 and 1,280, respectively, which shows that the power of buyers is restrained.

“On Wednesday, the market mood on the foreign floors was optimistic, which allowed the Russian market to regain some losses. But the general situation for the Russian benchmarks remains unclear, and the ruble faces the risks of further contraction if the geopolitical factors worsen and financial regulators don’t provide a helping hand,” Kozhukhova said.

The global markets are calm as investors are waiting for Thursday’s releases of macroeconomic statistics, but Powell may erase the will of foreign players to take risks, she said.

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