The Russian stock market have exhausted the growth potential

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After initial attempts of growth of Russian indices were back in negative territory, and especially got index Mosberg, who again felt the influence of the monetary factor and dipped for a day on 1,17% – to 2789,66. RTS has fallen in price on 0,62%, finishing at around 1398,88. In the first half of day the dollar index managed to upgrade to 5-year high, where he met trying to fix profit.
The external background as a whole was good, but again unstable. The optimism from the “soft” statements by the fed pretty quickly vanished, especially after strong data on U.S. inflation, which, as recent statistics on the labour market, at odds with the aggressive decline rates.
Market participants now even more doubt that at the end of this month, the Central Bank will reduce the cost of lending, from 0.5%. The baseline scenario assumes the monetary policy of a quarter of a percent, and even fresh strong report is unlikely to persuade the regulator, which has already prepared the markets to change course of monetary policy.
After a promising start to the day and rally a day earlier, Brent stumbled on offer in the area 67,60 per barrel and has lost almost all points scored. Previously to the growth of quotations has pushed bullish report Ministry of energy, the dovish tone of the fed and the news about the storm in the Gulf of Mexico.
But, in contrast, made trump and OPEC. The cartel has provided a disappointing forecast for the year 2020, which expects profit proposals in the area of 560 thousand barrels per day, mainly due to further growth of activity in the United States.
And trump, meanwhile, criticized China for what he buys agricultural products of the United States. Against this background, it is possible that in anticipation of the weekend buyers will not risk, and therefore during today’s trading, Brent is unlikely to show a steady rise.
It is noteworthy that the Russian indexes sank, while the rest of the emerging markets segment showed mostly positive dynamics.
This may indicate that our overheated pads is brewing a full-fledged correction, which can be developed in the next few days, if the world arena is not received super positive news. Given that trump has to remind the markets that a trade war with China continues, there is a risk of some deterioration in investor sentiment, especially given the fact that markets are already virtually played to the expectations of a rate cut by the fed.
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Alexander Timofeev,
Head of analytical Department,
IR “Instant”invest