In the stock markets is brewing new year’s eve collapse
The external background remains negative. Oil renews the minimum value in 14 months, the risks of new restrictions from the US are rising. The main losses of the domestic market associated with the oil and gas sector, which is clearly not benefiting from low oil prices and a relatively stable ruble. Papers “Aeroflot”, on the contrary, rose in price by 2.6%, as cheaper oil means lower fuel costs. It is also worth noting the sharp increase in activity. By mid-session on the main section of the Moscow exchange trading volume exceeded 22 billion roubles, which is typical of turning points in the market.
To 15:15 (GMT) Mosberg index was down 1.26% to 2329,52 p., and the RTS fell 1.55% to 1096,18 p.
The ruble weakened after oil, although colleagues in the raw materials workshop has strengthened against the dollar. By the middle of Moscow trading, the barrel of Brent cost about 3895 roubles. One-day rate MosPrime has decreased to 7.92%, the week increased to 8.03% and monthly increased to 8.29%. In General, we can talk about the growth of demand for rouble resources in connection with the tax period. On the other hand, the domestic currency is under pressure again aggravated the risks of new restrictions both on the question of intervention in the American elections, and other irritating Washington. Accordingly, the probability of strengthening of rouble at the moment remains very low. To 15:15 (GMT) USD/RUB – 66,947 (+0,25%), EUR/RUB – 76,245 (+0,66%).
The main losses in Europe were also associated with the energy sector. The pound and the Euro strengthened its positions in anticipation that the fed will soften plans to raise rates for 2019. However, the ECB may also require a softening of rhetoric, at least. The German index of business expectations fell to 97.3 p. in December, when expectations of falling to 98.3 p. assessment of the current situation has deteriorated to 104.7 PS of 105.5 p.
The business climate index fell to 101,0 102,0 p. p. with the Situation on the bond market also suggests that risk appetite is very low. The yield on the 10-year Treasury obligations of the United States fell to 2.83% on similar German bonds to 0,241%. To 15:15 (GMT) DAX 10813,8 p. (+0,39%), CAC 40 4797,16 p. (-0,06%), FTSE 100 6740,81 p. (-0,48%).
Oil “bulls” are losing patience. Agreement OPEC+ will start only in January, and while the market is saturated with oversupply. Reuters writes that in Russia, oil production made up 11.42 million bar. in December. The situation is similar in Saudi Arabia and the United States. Overall, these three countries increased their production since the beginning of the year almost 3.5 million bar. (more than 3% of world consumption). Coupled with the slowdown in the global economy excess supply creates risks of further decline of quotes. Accordingly, the correction may not be complete and may last up to zone $50-53. To 15:15 (GMT) Brent crude – $57,91 (-2,85%), WTI – $of 48.58 (-3,23%), gold – $1251,8 (+0,00%), copper – $5977,85 (-1,56%), Nickel – $10935 (-0,46%).
The dollar index was down 0.37% to 96.25 p. AUD strengthened 0.25% and NZD by 0.85% against the greenback. To 15:15 (GMT) EUR/USD – $1,139 (+0,36%), GBP/USD – $1,269 (+0,58%), USD/JPY – 112,35 (-0,43%).
The U.S. index futures indicated the possibility of the start of trading in the positive territory of 0.4%, Dow Jones up 0.55% on the NASDAQ. After another defeat on the eve of the investors hope that the fed will soften its approach to future rate increases that will be seen as positive for risky assets. On the other hand, charts of the major indices point to a strong oversold.
Among active shares can be shares of Oracle Corp., which recently reported better than expected. Johnson and Johnson announces buyback program, which probably is an attempt to compensate for the loss of reputation because of the scandal with the discovery of asbestos in products for children. Unfortunately, a possible rebound in the U.S. market will be of little help to domestic assets. The risks of further decline of oil prices, coupled with increasing risks of new restrictions are not conducive to shopping.
Accordingly, the fall in the index may continue. The ruble also becomes more sensitive to oil, although any sudden movements, it keeps the demand of the tax period.