Unfavorable environ, Rosneft-Sistema suit drag Russian stocks down

MOSCOW, May 3 (PRIME) -- Russian stocks decreased on Wednesday due to unfavorable external environment, while shares of multi-industry holding Sistema slumped following a 106.6 billion ruble suit filed by oil major Rosneft and its unit Bashneft, analysts said.

The MICEX fell 1.64% to 1,993.66 and the RTS decreased 2.13% to 1,096.35.

“The Russian stock indices have been in the red zone since early morning as investors priced in contraction on the European floors. Europe was in the red zone largely due to the escalation of tensions between Britain and the E.U. foreshadowing tough talks on the Brexit. The additional negative factor came from oil prices that are unable to form an upward correction,” Igor Kovalyov, an analyst at InstaForex group of companies, said.

Andrei Kochetkov, an analyst at Otkritie Broker, said that Wednesday morning was marred by the news about Rosneft’s lawsuit against Sistema, in which the oil major said that Sistema deliberately reduced Bashneft’s value during ownership of the company and hushed the fact. The news also led to sales in companies connected to Sistema, he said.

Sistema plunged 36.92% to 14.06 rubles, while mobile operator MTS lost 10.40% to 247.30 rubles and children goods retailer Detsky Mir fell 7.03% to 85.53 rubles on the news.

“Sales in all of these shares dragged down the whole market, as Sistema and MTS account for 0.8% and 2.73%, respectively, of the MICEX index base,” Timur Nigmatullin, an analyst at investment company Finam, said.

Kochetkov said that the negative mood of the market was partially offset Gazprom, which lost only 0.52% to 135.81 rubles on the news that the European partners agreed to provide credit support to the Nord Stream-2 natural gas pipeline and on hopes for a more direct solution of problems with exports to Turkey.

Below are the MICEX’ five most active stocks on Wednesday:

Company	Change, %	Last price, rbl	Trading volume, bln rbl
Sberbank	-1.16	164.71	5.533
Gazprom	-0.52	135.81	4.522
Sistema	-36.92	14.06	4.393
Lukoil	-3.28	2770.00	3.761
MTS	-10.40	247.30	3.028

(56.9518 rubles – U.S. $1)

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