The Russian market is growing again, but very slightly

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The Russian market is growing again, although this improvement is very small, especially when accounting for the increase in prices of Brent above $62 per barrel. The strongest increase show paper En+ (7%) and “RUSAL” (over 4%) on the background of statements of the U.S. Treasury on its commitment to lift sanctions against the assets of O. Derepaski. The shares of “LUKOIL” and “Rosneft” have grown more than 0.4% due to positive dynamics in the oil.
Shares of the Moscow exchange rose in price by 2.8% after a strong operational update for the year 2018. Among the outsiders of the day were preferred securities of “Bashneft”, which the day before has risen beyond measure and “LSR”. Activity at the auction Friday was the highest since December last year. The volume of transactions in the main section of the Moscow exchange exceeded 17 billion roubles to the middle of trading.
15:20 (GMT) index of Masuri grew by 0.3% to 2441,44 p., and the RTS grew by 0.56% to 1148,69 p.
The ruble was the weakest among commodity currencies. By the middle of Moscow trading, the barrel of Brent was about 4145 roubles. One-day MosPrime rate remained at the level of 7.88%, week dropped to 7.93%, and monthly increased to 8.23%. Negative for the ruble was the announcement options of currency procurement of the Ministry of Finance of the Russian Federation in the period from 15 January to 6 February. Under budget rules, the CBR will buy currency in the 265,8 billion (about 15.6 billion rubles a day). In addition, you can use funds from previously unsold volumes. In General, the demand in those operations could reach us $4.2-4.5 billion
Accordingly, the concerns of the market on account of the resumption of a stable tendency towards weakening of the national currency have a very specific reason. As opposed to will be the tax period, as well as the continuing positive balance of trade and balance of payments. Furthermore, February 16 will be held the first auction, OFZ, which could clarify the situation with the demand for ruble debt. 15:20 (GMT) USD/RUB 66,96 (+0,07%), EUR/RUB – 77,205 (+0,39%).
European stocks mostly traded in the red, although started the day with steady growth. The British newspaper Evening Standard writes that in the office of Theresa may believe that leaving the EU may be longer than the earlier date of March 29. Due to this, the pound sterling slightly strengthened its positions against the dollar and the Euro. Negative for European stocks was the statement from Ford Motor to review plans of the business in Europe, which implies a reduction of several thousand jobs at the enterprises of Germany, France and probably the UK. Britain is also at risk of losing jobs because of the divorce with the EU, but the statistics to deteriorate in advance.
Industrial production declined 1.5 percent in November compared with the same period a year ago. It was expected that the reduction will amount to only 0.7%. The Chairman of the Commission for economic relations of Germany with Eastern Europe Wolfgang Buchel said that US attempts to impose sanctions on European companies for the use of Russian gas is actually an attack on the independence of Germany and Europe. In fact, the front of a trade war – a struggle not only for markets for us LNG, but also for the energy preferences of German business compared to other countries in the continent. 15:20 (GMT) DAX 10860,43 p. (-0,56%), CAC 40 4777,08 p. (-0,59%), FTSE 100 6928,94 p. (-0,2%).
The weakening of the dollar has allowed oil to continue rising. Quotes of Brent reached $62.5 per barrel. If the day closes in the black, then it will be the tenth consecutive session, when Brent and WTI prices are rising. Such a long period of growth to nine consecutive sessions was not to Brent on December 4, 2007 and returned on 6 January 2010. In addition, it is worth noting the fact that contracts are indicative of a bear market, which was quite short. However, the risks correction can occur in the vicinity of $63,8 per barrel of Brent. Earlier we noted that the restoration of quotations has begun after the quotes dropped to the 61.8% in the range of minimum values in January 2016 and October high of 2018.
Accordingly, the $63,8 corresponds to the 38.2% retracement from the October high. It should also pay for the two-week Relative Strength Index, which also begins to point to the excessive overbought asset. 15:20 (GMT) Brent crude – $61,78 (+0,16%), WTI – $52,81 (+0,42%), gold – $1293,4 (+0,47%), copper – $5844,47 (+0,51%), Nickel – $11455 (+1,82%).
The dollar index was down 0.32% to 94,843 p. CAD, AUD and NZD strengthened from 0.25% to 0.8% relative to the U.S. dollar. 15:20 (GMT) EUR/USD – $1,153 (+0,3%), GBP/USD – $1,282 (+0,54%), USD/JPY – 108,27 (-0,15%).
For the evening segment of trading can be interesting data on consumer inflation in the United States. However, with partial funding from the government, the statistics may also be delayed. Before the start of trading in the US futures for the major indexes declined from 0.15% in the Dow Jones to 0.3% in the NASDAQ. On foreign markets the situation may deteriorate against the background of strong assets in the first trading session of the year. The Russian market still holds the trend of growth due to the oil and hopes to support Europe in major economic projects.
Andrei Kochetkov,
Senior analyst,
“Opening Broker”