The Russian stock market ignored the drop in oil prices

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Yesterday showed how sensitive the global financial markets to signals in the context of a trade war. During the trading dynamics of the stock markets was mixed. A cautious return of interest to risk gave way to sales, and the catalyst was the fall in the Chinese yuan to new 11-year lows. The focus of attention of global investors clearly remain, relations between the US and China, and in light of the recent escalation of conflict in the markets occur emotional outbursts due to increased uncertainty and growing risks to the global economy.

Oil panic

The Russian market has behaved more restrained in comparison with colleagues, especially given the magnitude of the drawdown in oil prices. Index Mosberg closed down 0,315 at the level of 2674 and the RTS dipped by 0.74% to 1284,91. Brent at the moment has updated the lows of the beginning of the year under a mark of 56 dollars per barrel, while last week reached levels above $ 65. Increased volatility in the raw materials segment is also explained by sensitivity to the developments on the trade front.
Locally oil on the fire poured unexpectedly bearish report of US Department of energy, which reflected the growth in crude oil inventories of 2.4 million barrels against forecasts for a drop of almost 3 million More, well has increased gasoline reserves and production almost back to record highs after the recent decline due to disruptions in the Gulf of Mexico. For almost two months signs of a slowdown of activity in the shale deposits of the United States served as a prop for oil prices, and now this factor is support, it seems, leaves the stage, provided that further escalation of the trade war promises Brent new losses.
The Russian market is still largely ignores the situation on the market of black gold. However, a deeper drawdown of quotes combined with the devaluation of the yuan and the tense situation in world trade can break relatively stable attitude and to lead a more aggressive sales. In such circumstances, expectations of monetary easing by global Central Banks will not be able to deter a potential pressure.
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Alexander Timofeev,
Head of analytical Department,
IR “Instant”invest