The Russian stock market remained without support

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By the middle of the trading day the main Russian stock indices of RTS and Mosberg demonstrate a moderate decrease relative to the levels of the previous closing. Their current decline is quite logical, since formal deterioration of the external environment created conditions for the negative start of trading in Russia. New signals for directional movement of the local stock market has not yet been received. Therefore, the indices of Mosuri and RTS went into a state of consolidation in the middle of their weekly ranges.
We add that the oil market is demonstrating mixed intraday deviation. By mid-day it is the prevailing negativity. Participants in commodity trading are waiting for night for the weekly data on reserves of crude oil in the United States from the American petroleum Institute (API). As usual, the official statistics from the US Department of energy will be released already next day, i.e. Wednesday evening. In the meantime, the futures for Brent crude are moving within a relatively narrow range of $76-$77 per barrel.
To 15.45 GMT Mosberg index decreased by 0.67%. The RTS index lost 0.75%. December futures on the RTS index (RIZ8) are traded in as minor backwardly equivalent to 2.6 p, or about 0.2% relative to the reference indicator. Thus, the futures market participants are close to a neutral assessment of the medium-term prospects of the RTS index.
The small intraday drawdown index Masuri most liquid stocks traded mixed with a moderate deviation in the range of 1-2% relative to the levels of the previous close.
One of the noticeable trends of the current day was the intensification of trading activity in the securities of the largest retail chains: Magnet (MGNТ RM, +2.12%), FIVE-GDR (FIVE RM, +1.08%), Ribbon, etc. (LNTA RM, -2.00%), M. Video (MVID RM, -1.53%), ERS-AO (RM OBUV, 0.99%). After the publication of the quarterly results it is time to review positions in these securities. Medium-term prospects for retail sector remain tough.
Retailers are faced with the pressing need to improve their own efficiency in the medium term. Undoubtedly, this will bring positive results in future years. It should be noted that the shares of food retailers now clearly does not look overbought;. So it makes sense to look at it with an investment horizon of 1-3 years, based on little to improve the situation in the retail sector.
Shares of ALROSA (ALRS RM, +0.38%) traded stronger than the market expectations of the official commissioning of diamond deposits “Verkhne-munskoe”. Given the already quite a long time stop of operation of the emergency mine “Mir”, the significance of this event cannot be underestimated. Putin will take part in the launching ceremony of a new production asset in a videoconference format. Indigenous top-munskoe mine includes 4 kimberlite pipes. It was the biggest opening of the company “ALROSA” in the past decade. His development will be conducted in an open way.
Much worse the market look like individual members of the oil and gas sector: LUKOIL (LKOH RM, -1.22%), NOVATEK (NVTK RM, -2.39%), Tatneft JSC (TATN RM, -1.63%), Surgutneftegas JSC (SNGS RM, -0.59%). Apparently, the industry negative for these securities acts, the threat of possible introduction of export duties on oil and petroleum products to stop the growth of the internal prices for fuel. The flip side of this measure remains voluntary-the compulsory containment of growth in wholesale gasoline prices.
Currently, the index Mosberg again approached its morning lows and found support at the outskirts around 2300 p. Some influence on the local stocks can still provide the publication of the October index of consumer confidence in the United States (17.00 GMT). In General, we expect the prices of Masuri near current levels, with a moderate decline of 1% on the day.
Vitaly Manzhos,
Senior risk Manager,
IR “Algo Capital”