The Russian stock market rising oil optimism

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On Tuesday, leading stock indexes of Russia could interrupt the current bearish correction due to a considerable revival of the thrust to risk, combined with rising oil prices, which accelerated towards the end of our trades. At the end of the day the index Mosberg, which fell for eight consecutive sessions reaching 1.5-month lows, rebounded by 0.62%, returning to around 2700, to close at 2701,06. RTS showed more modest gains due to the multidirectional trading of the ruble, which dipped slightly against the dollar and strengthened against the Euro. So, the dollar index has risen on 0,32% – to 1345,48.
The external background has considerably improved in the reported resumption of trade talks between Washington and Beijing on 29-31 July. Recall the dialogue between the two countries stalled in may, and since then the parties have not moved forward, already beginning to alarm investors, especially amid global economic slowdown. In a broader context, risk assets continue to receive support in anticipation of easing by the key Central Banks of the world.

The ruble has updated lows

The Russian currency has updated a 2-week lows against the dollar in the area of 63.30 RUB that was mainly due to movements in market Forex where the American currency showed a steady growth, especially in tandem with the Euro. Meanwhile, the Euro/ruble dipped about 0.3%, settling in the area 70,50 RUB the cause of the aggressive sales of the single currency was trading statements, representatives of the EU Cecilia malmström that the United States does not want to start negotiations on free trade, which would entail the introduction of some additional barriers. Further Euro pressure the upcoming ECB meeting. Thus, it is not excluded that in the nearest future Euro will continue to decline and will try to test support area of 70.40 RUB.
As for the stock indices, while maintaining interest in high-yield assets not excluded attempts to continue the restoration. Judging by the continued rise in the indexes today in Asia, where investors play a speedy resumption of negotiations between the US and China, at the start of the session can be proclivities of the bulls. But since our market is still under bearish correction, the rebound may be temporary and short-lived, especially since the rise in oil prices has once again stalled.
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Alexander Timofeev,
Head of analytical Department,
IR “Instant invest”: