US polls uncertainty to cap Russian stocks growth in early trade

MOSCOW, Nov 3 (PRIME) -- Russian stocks are likely to open higher on Thursday as the market will price in a morning increase of oil prices, but the uncertainty about the U.S. elections outcome will restrain growth, analysts said.

“We expect the market to open with a moderate increase of about 0.3% of the MICEX index close to 1,975. The levels of 1,965 and 1,950 points will become support, while 1,980 and 1,990 will act as resistance,” and the market is very likely to price in the morning increase of oil prices, Vitaly Manzhos, a senior analyst at Bank Obrazovanie, said.

The Brent oil price rose 1.09% to U.S. $47.37 per barrel as of 9.10 a.m. Moscow time.

“It looks like that the MICEX index will demonstrate moderate growth close to 1,970–1,980 in the first half of the day, but a rebound from yesterday’s significant contraction will be restrained by a mixed background, uncertainty around the U.S. elections and a mood for a correction ahead of a long weekend,” Timur Nigmatullin, an analyst at investment company Finam, said.

Oleg Shagov, head of investment company Solid’s research department, said that the U.S. stock volatility index VIX, which is often called an investor ‘barometer of fears,’ has grown for a seventh consecutive trading session in a row to increase by 48%.

“This means that the U.S. investors are worried ahead of the U.S. presidential elections, and bookmakers noticed a greater number of bets on Donald Trump’s victory,” Shagov said.

But Anton Startsev, a senior analyst at investment company Olma, said that technical analysis shows a possibility of a downward correction of the RTS index.

“The U.S. Department of Energy statistics confirmed growth of crude oil reserves, which is a negative factor for the oil market. At the same time, the U.S. Federal Reserve System has expectedly left some ‘space for maneuver’ and made no definite statements prior to the presidential elections,” he said.

The elections are a source of uncertainty for the U.S. stock market, and a restraining factor for investors all around the world, Startsev said.

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