The Russian stock market will finish the week in positive territory

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Last Thursday, the main Russian stock indices Mosberg (+0.04%) and RTS (+0.19%) ended the day with slight increase towards the levels of the previous closing. They spent the entire trading day in a state of consolidation within the boundaries of the relatively narrow ranges. It was promoted by an ambiguous external background.
Among important external signals yesterday it was possible to select only favourable statistics weekly change in the number of initial claims for unemployment benefits in the United States. Their number decreased by 12 thousand against the expected reduction of 4 thousand However, the publication of these data did not cause a significant improvement in sentiment in the equity markets in the US and in Russia.
It should also be noted yesterday the uncertainty of participants in the commodity market. Futures for Brent crude several times changed the direction of its movement. But they still managed to hold above the nearest significant price level of $60 per barrel, which is interpreted as a positive factor for the local stock market.
Medium-term technical picture of the indexes Mosberg and RTS according to the results of yesterday’s trading practically did not change. It can be estimated as neutral. But do not forget that the ruble index Mosuri are close to their weekly and three-month low. In case of drawdown more than 2% from the current value it will form a negative technical signal of further falls.
At the close of formal trading session September futures on the RTS index (RIU9) went into a state of contango with a value of 3.2 points, or about 0.25% relative to the reference indicator. Futures market participants remain neutral assessment of the medium-term prospects of the RTS index.
On the background of insignificant growth of the index of Masuri held at the end of the day, the most liquid stocks ended mixed with an irregular deviation in the range of 1-3% relative to the levels of the previous close.
Among the blue chips leading the growth was allocated to the shares of MMC Norilsk Nickel (GMKN RM, +2.25%). They are routinely updated its historical maximum, which now amounts to 15500 RUB an Objective stimulus for the observed purchases in these securities acts as the recent publication of strong financial statements of Norilsk Nickel according to IFRS for the 1st half of 2019. The company’s net profit for the period increased 81% to $2997 million in addition, the Board of Directors of MMC has recommended the payment of interim dividend in the amount of 883.93 RUB per share, which is approximately 5.7% of the current cost of these securities.
Paper Mechel JSC (MTLR RM, +3.38%), Mechel-Pref (MTLRP RM, +1.59%), Raspadskaya (RASP RM, +0.85%) was traded stronger market. Obviously, the information the reason for this was yesterday’s meeting of the President of the Russian Federation with the governors of coal-producing regions. It was announced plans of increasing coal production in Russia from 440 million tons to 550-670 million tons by 2035.
Papers of Aeroflot (AFLT RM, -1.17%) was subjected to aggressive sales in the first half of the day without significant information occasion. Yesterday they went out in eighth place for speed among the stocks on the Moscow exchange. It was later published operating results of Aeroflot Group for July and 7 months of 2019. They pointed to the slowdown in the growth of passenger traffic and passenger turnover in July compared to the cumulative total from the beginning of the year. In addition, in July a few, the tendency to reduce the percent of employment of armchairs.
Paper Transneft-Pref (TRNFP RM, -2.01%) has renewed its annual minimum. They continue to be under pressure due to numerous unpleasant consequences of pollution, poor network of oil pipelines “Friendship”.
It is also worth noting yesterday’s weak stock Magnet (MGNТ RM, -1.01%). Investors and speculators were not encouraged by the news that the trading network began testing a new format of shops “the Magnet of the evening,” with a predominance of alcoholic beverages. After a long time change of the main shareholder of the company, it looks like another management experiment. Previously it was assumed the development of a network of ultra stores at gas stations and post offices. In addition, the retailer has taken steps to launch a pharmaceutical business. Meanwhile, half-yearly net profit of “Magnit” under IFRS decreased by 44.8% in comparison with the 1st half of 2018, to the level of 9.8 billion rubles. At the same time, net debt of the retail chain with the end of 2018 increased by 43.6 billion rubles, to the level of 181.4 billion.
This morning the futures on US stock indices showed a significant increase in the cost in the range of 0.3-0.5%. Contracts for Brent crude rose by 0.2%. Gold futures lost 0.3%. Chinese stock index Shanghai Composite rose 0.4%. The Japanese Nikkei225 index rose 0.3%.
The external background before bidding in Russia can be characterized as positive. This creates conditions for the opening of index Mosberg with moderate growth.
The index Mosberg with a moderate increase of about 0.3%, near the mark 2685 p. as the nearest supports will be the levels 2670, 2660 p. Significant resistance is seen around 2690, 2700 p.
After moderately positive opening, the index Mosberg may continue slow increase in the band 2690-2700 p. This contributes to moderate the morning improvement of an external background.
In the second half of the day is the key external reference point for participants in the local trading will remain dynamics of oil contracts. Some influence on the course of trading in Russia may also have a speech by fed Chairman Jerome Powell regarding the US economic Outlook (17.00 GMT). “In the shade” this event will remain concurrent release of the July statistics on new home sales in the United States.
Vitaly Manzhos,
Senior risk Manager,
IR “Algo Capital”