The Russian stock market ended the week with a fall

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Last Tuesday, the main Russian stock indices Mosberg (-0.31%) and RTS (-0.45%) ended with a moderate decline relative to the levels of the previous closing. Inside the day, they showed a deeper drawdown. However, the evening improved sentiment in the oil market has enabled the local stock market to regain some of their losses. From a technical point of view, we observed the deviation index Mosberg and RTS from a recent long-term highs.
However, this deviation is quite restrained. In other words, these indices have accumulated relieve overbought not in the form of a sharp pullback, but in the form of consolidation.
Among important external events should have only noted the increasing tension between Iran and the United States that it can be a catalyst for further medium-term rise in oil prices. The representative of the Iranian foreign Ministry said that the imposition of sanctions by the US against the Ayatollah Ali Khamenei, diplomatic way between Tehran and Washington was closed. At the same time, U.S. Secretary of state Mike Pompeo said that pressure on Iran will continue until such time as Tehran will not sit at the negotiating table.
By the way, this factor has an impact not only on the value of hydrocarbons. In contracts of gold is also observed medium-term uptrend. Yesterday futures on the yellow metal once again updated its six-year high. They briefly exceeded the price level of $1440 per ounce.
At the close of formal trading session September futures on the RTS index (RIU9) came to the state of backwardly a value of 29 points, or about 2.1% against the baseline indicator. Futures market participants remain negative assessment of the medium-term prospects of the RTS index.
On the background of a moderate decline in the index Mosberg held at the end of the day, the most liquid stocks ended mostly lower in the range of 1-5% relative to the levels of the previous close.
Leading the decline yesterday, the separated liquid representatives of the electricity sector: Inter (IRAO RM, -4.51%), Russian grids JSC (RSTI RM, -5.19%), Russian grids Pref (RSTIP RM, -4.09%), FGC UES (FEES RM, -2.39%), TGK-1 (TGKA RM, -4.29%). In General, all of these papers until recently, were clearly in overbought; medium-term time period. Therefore yesterday’s fall wore corrective in nature. This also applies to the securities of TGC-1, which was held on the dividend gap in trading mode T+2.
An additional reason for the sale of the securities of the Inter was the message that CEO and Chairman of the management Board of the Issuer Boris Kovalchuk completely sold he owned a stake in the company. Previously, he owned about 0.15% papers Inter. However, in the foreseeable future, he may again become a shareholder. Currently, Inter is developing a new strategy. Part of her motivational programme management is expected to include the option of payment of stock awards of the company.
Among blue chips is significantly better than the market traded securities of oil company LUKOIL (LKOH RM, +0.75%). They are supported by the ongoing buyback programme of the Issuer on the open market. From August 2018 the company LUKOIL has already acquired approximately 4.83% of their own securities.
Pay attention to yesterday’s growth the value of the shares of Aeroflot (AFLT RM, +1.06%).
The above securities has managed to gain a foothold above the important psychological and technical price level was 100 RUB. It happened amid a series of corporate events of the Issuer. Yesterday, the shareholders of the company approved the payment of annual dividends of RUB 2.6877 per share, which is about 2.7% of the closing price of these securities. In addition, it became known that the Group “Aeroflot” has increased transportation of passengers by 12.0% in may to 14.6% in the current year.
Much stronger market also closed paper NLMK (NLMK RM, +1.76%), Surgutneftegaz-Pref (SNGSP RM, +0.39%), Severstal (CHMF RM, +1.14%), MMK (MAGN RM, +0.83%), Polymetal (POLY RM, +2.63%), Pharmacies 36и6 (APTK RM, +19.00%).
This morning the futures on US stock indices show a slight fall in value within 0.1%. Contracts on Brent crude after the evening growth has risen by 1.5%. Gold futures lost 0.4%. Chinese stock index Shanghai Composite fell 0.3%. Nikkei225 declined by 0.6%.
The external background before bidding in Russia can be characterized as uncertain or mixed. And yet, continued improvement in sentiment in the oil market creates conditions for the opening of index Mosberg cautiously raising.
The index Mosberg with a slight increase of about 0.2%, near the 2760 p. as the nearest supports will be the levels of 2750, 2740 p. Significant resistance will remain the mark of 2770, 2780 p.
In the first minutes of trading, the index Mosuri will receive support in connection with the morning rising cost of oil futures. Later he can go into a state of consolidation around the opening level, pending the receipt of new external signals for directional movement.
In the afternoon an indirect effect on the course of trading in Russia may have the publication of the may statistics on the volume of orders for durable goods in the United States (15.30 GMT). In addition, at 17.30 MSK will be published weekly data from the US Department of energy on changes in stocks of petroleum and petroleum products.
Vitaly Manzhos,
Senior risk Manager,
IR “Algo Capital”