Stocks to open flat on trade war, ahead of economic indicators

MOSCOW, May 21 (PRIME) – The Russian stocks are likely to open unchanged on Thursday as the investor mood was soured by a new twist in the U.S.–China trade war as the market is waiting for releases of macroeconomic indicators that would give an insight into recovery from the coronavirus pandemic, analysts said.

“While technical analysis points to movement of the RTS Index above 1,170 as a signal for growth, the external factors may halt the upward movement at the beginning of trade,” investment company Olma’s senior analyst Anton Startsev said.

U.S. President Donald Trump again criticized China’s policy at Twitter, while the U.S. senators approved amendments to legislation that may potentially cancel listings of Chinese companies on the U.S. bourses, Startsev said.

“A new spiral of the trade war may hurt activity of buyers on markets in general,” Startsev said.

Yelena Kozhukhova, analyst at Veles Capital, said that the international stock markets still have some potential for short-term growth, but much will depend on the macroeconomic data to be released during the day.

“In general, the majority of indicators, including business activity in Europe and the U.S. and the U.S. labor market, are likely to signal weakness of the regional economies, but they may also show some improvement, which could support the bulls,” Kozhukhova said.

Georgy Vashchenko, head of the department for trade operations on the Russian stock market at investment company Freedom Finance, expects the national market to open mixed.

“We don’t rule out taking profits in long positions, as market recovery has significantly outperformed economic recovery. The U.S. is to release labor market data today, while no significant internal Russian news is expected,” Vashchenko said.

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