The Russian stock market to the middle of the day lost about 1.5%

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By the middle of the trading day the main Russian stock indices of RTS and Mosberg significantly decreased relative to the levels of the previous closing. After moderately negative opening, they have continued to leisurely slide down under its own weight. Today this is helped by the adverse external background. Contracts for US stocks since early morning, traded with a marked decrease. What sways futures for Brent crude, they managed to stay above the important round level of $80 per barrel. It is interpreted as a worrying medium-term signal for the oil market in General, and for domestic stock indexes.
We will add that today’s fall in the index Mosberg until it looks threatening in the medium term. After the large fall and the subsequent growth of the October correction, the index is in a state of damped oscillations close to the current level, i.e. around 2400 p. most Likely, the local “bulls” and “bears” are still repeated and difficult struggle for the specified level during the following days.
To 15.30 Moscow time the index of Masuri decreased by 1.07%. The RTS index dipped by 1.48%.
December futures on the RTS index (RIZ8) traded today in a state of near parity relative to the reference indicator. Thus, the futures market participants about the medium-term prospect RTS index neutral.
A significant intraday decline in the index Masuri, the most liquid stocks traded mostly lower in the range of 1-3% relative to the levels of the previous close.
It is only natural that today’s much weaker market look, many representatives of the oil and gas sector: Gazprom (GAZP RM, -2.03%), LUKOIL (LKOH RM, -1.54%), Gazprom Neft (SIBN RM, -3.05%), Tatneft JSC (TATN RM, -1.30%). Members of the local trades cannot and would not ignore the significant deterioration of sentiment in the oil market. The traditional exception to its sector perform protective paper Surgutneftegaz-Pref (SNGSP RM, +0.35%). Company “Surgutneftegas” is largely protected from falling prices of “black gold” due to its large currency reserves.
Shares of Aeroflot (AFLT RM, -2.09%) continue to upgrade their two-year lows. In addition to the increase in costs of aviation fuel and the threat of imposing targeted sanctions from the United States, pressure and technical factors. After a confident drawdown below the price level was 100 RUB. in these papers can happen a mass triggering of stop orders, which at some time will move them even lower. We should also consider the characteristic of these stock inertia. In 2016-2017, they observed a long lingering growth that seemed excessive and unreasonable. It is not excluded that the formed downtrend in these papers is also far from complete.
Note also the strong increase in the intraday value of shares of KAMAZ (KMAZ RM, +6.70%). Perhaps the interest in these securities is associated with corporate news about successful diversification of blacksmith’s production of “KAMAZ” and with the launch of the new automatic quenching of the complex at the foundry. In addition, the positive branch signal became the news of the preparations for the introduction of a new investment regime in the domestic automotive industry. The largest industry lobbying for the rejection of state support for the new auto industry. In the Wake of today’s purchases shares of “KAMAZ” has managed to significantly rebound from its three-month low.
Currently, the index Mosberg stabilized around the level of 2385 p. Weekly data on the change in the number of initial claims for unemployment benefits in the US were slightly better than the consensus forecast. Therefore, the condition of the external background, most likely, will not deteriorate to the main window of trading in Russia. In General, we expect the prices of Masuri with a significant decrease in the range of 0.5-1.5% by the end of the day.
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Vitaly Manzhos,
Senior risk Manager,
IR “Algo Capital”