Unfavorable environment to cause contraction of Russian stocks

MOSCOW, Jun 6 (PRIME) -- The Russian stock market is likely to start Tuesday’s trading session with a contraction caused by a slew of negative factors, analysts said.

Head of Alor Broker’s investment consulting department Alexei Antonov said that the sales prevailed during the evening session of the MOEX Russia Index on Monday after a 0.9% loss in the main session.

“There is no one reason for the depressive market mood. It was triggered by worsening of the geopolitical background, the upcoming end of the dividend season, the overbought state of the market, and even by the fact that people expected more from the OPEC+ meeting,” he said.

The external background also does not favor the buyers at the start of the day. The oil price lost 0.5% and may continue its moderate contraction later in the day. Even the technical condition of the Russian market worsened on Monday – the market may have to fight for the 2,620 resistance level on Tuesday. If the index falls below that, sales may deepen because of the technical factor, Antonov said.

BitRiver’s financial analyst Vladislav Antonov said that the MOEX Russia Index fell by 0.93% to 2,694.14 on Monday. “The buyers refrained from climbing above 2,750, and another return of the index to the support level raises the possibility of a downward correction to deepen to the level of 2,615,” he said.

The market is not ready to ramp up purchases of the futures for oil because the Chinese economy is recovering slowly. The U.S. will start buying oil only in August. One should expect any activity of the buyers on the oil market after the June 14 meeting of the U.S. Federal Reserve System, BitRiver’s Antonov said.

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