The global stock market has entered a stage of global collapse
On Wednesday, the main Russian stock indices Mosberg (-1.07%) and RTS (-1.39%) ended with significant reduction in relation to the levels of the previous closing. Despite the intraday attempt of growth on the local stock market is still the prevailing pessimism. Members of the local trades are unable to ignore the evening deterioration of the external environment, expressed in a strong decline of the major stock indexes in Europe and the United States. His negative role played and the sharp deterioration in sentiment in the oil market.
Moreover, already after closing of the main trades in Russia, the main stock indexes in the US sank by more than 3%, while contracts for Brent crude is rapidly moved to the bottom of its weekly range.
The stock market in the United States yesterday came under pressure due to rising yields ten-year Treasury bonds up to a maximum of seven levels. As for oil contracts, they received an additional blow late in the evening by the American petroleum Institute.
According to weekly data API crude oil inventories in the U.S. increased to 9.75 million barrels, which represents a record weekly gain since February, 2017.
Taking into account these factors, we can say that the Russian stock market has not had time to fully win back yesterday’s negative appearance. Therefore, in the first half of day indexes of RTS and Mosberg can continue his yesterday’s fall. Most likely, at the time of opening they will lose more than 1%.
By the end of the evening trading session, the December futures on the RTS index (RIZ8) came to the state of backwardly magnitude in p. 23, or about 2% relative to the reference indicator. Thus, the futures market participants significantly downgraded the assessment of the medium-term prospects of the RTS index.
Given the strong subsidence of the index Mosberg held at the end of the trading day, the most liquid stocks ended mostly lower in the range of 1-4% compared to the levels of the previous close.
The leader of the fall among the blue chips were the shares of Gazprom (GAZP RM, -3.43%). Their yesterday’s rapid fall was in the nature of the corrective pullback from the recently updated long-term maximum. However, the medium-term uptrend in these papers is not yet broken. The improvement of the external background in these securities may resume purchases.
Shares of retail network “Magnet” (RM MGNТ, -2.57%) again looked significantly weaker than the market, despite the daily purchase of these securities in the framework of the recently launched procedure of repurchase. Perhaps we have observed the forced closing of margin positions and triggering massive stop orders. In addition, the market has not endorsed the controversial decision of the Board of Directors of a trading network on the acquisition of a pharmaceutical distributor “SIA group”. In General it can be noted that the shares of “Magnet” has obviously look oversold, even with the vague prospects of the retail sector. However, yesterday, we saw active sales and in the securities of two competing retail chains: FIVE-GDR (FIVE RM, -2.51%), Ribbon, etc. (LNTA RM, -3.25%).
Significantly better than the market yesterday the shares of NOVATEK (NVTK RM, +2.18%). This had very good fundamentals. Independent gas company reported an increase in total hydrocarbon production for the first 9 months of 2018, at 4.9%. In addition, sales of natural gas, including LNG, over the same time period increased by 8.5%. Another positive corporate news was the news about the opening of a subsidiary of the Issuer unique North of the Ob field. On its base can be implemented successful new LNG project.
Note also the visible multidirectional movement of interrelated papers “Transneft” -AP (TRNFP RM, +1.42%) and NCSP (NMTP RM, -3.89%). Yesterday, shares of NMTP have lost part of their recent growth related news about “Transneft” became the controlling shareholder of the port operator. What sways the preference shares “Transneft”, the interest in them has spurred talk of a possible procedure is to run the buyback.
Before you start trading in Russia the futures for US stock indices show a strong decrease of cost of about 1%. Contracts on Brent crude after an evening drop fell 1.5%. Gold futures added to the price of 0.3%. Japanese stock index Nikkei225 has fallen by 4.0%. Hong Kong’s Hang Seng dipped by 3.8%.
The external background before bidding in Russia can be characterized as extremely negative.
If you have any questions, please contact Vitaliy Mangos, senior risk Manager IR “Algo Capital”
• The index Mosberg with a strong decrease of about 1-1.5%, in the district 2380-2390 p. as relevant supports will be the levels 2370, 2350 p. Strong resistance level will remain 2420, 2450 p.
• In the first minutes of trading, the index Masuri will play a strong deterioration of the external background. After opening with a strong gap down it is possible his continued slide in the area 2360-2370 p.
• In the second half of the day in the U.S. will be published a large number of important statistical indicators. The greatest practical significance of these will have a weekly official data on the change of stocks of oil and oil products from the US Department of energy (18.00 GMT).
Senior risk Manager,
IR “Algo Capital