The Russian stock MICEX index went into a nosedive
By the middle of the trading day the main Russian stock indices of RTS and Mosberg greatly subsided in relation to the levels of the previous closing. However, they already there have been so far quite weak corrective bounce from intraday lows. It is likely that these indices will not go significantly lower.
The external background today is deteriorated. It can be estimated as the opposite of the positive, formed on Monday at the end of the G20 summit. Drawdown of the Russian stock market is also comparable to his recent large-scale growth. And this is logical, as investors and speculators reappeared reasonable doubt that the US and China will be able to quickly and painlessly terminate an ongoing trade war. However, a major blow to the Russian stock market made a strong intraday drop in oil prices.
However, the short-term increase in volatility in the futures of “black gold” became quite expected. In these hours deciding the fate of the current international restrictions on the production of crude oil of OPEC in the format+. By long tradition, the discussion of such decisions is in the form of very heated debates. They are very difficult.
To 15.30 Moscow time the index of Masuri decreased by 1.73%. The RTS index dipped by 1.85%.
December futures on the RTS index (RIZ8) are traded in as minor backwardly value in 3 p., or about 0.25% relative to the reference indicator. Futures market participants were once again close to neutral evaluation of the medium-term prospects of the RTS index.
On the back of strong intraday drawdown index Mosberg almost all liquid stocks are traded with a significant decrease in the range of 1-3% relative to the levels of the previous close.
Weaker than expected market look today many representatives of the oil and gas sector: LUKOIL (LKOH RM, -2.83%), Gazprom (GAZP RM, -2.64%), Rosneft (ROSN RM, -2.85%), Tatneft JSC (TATN RM, -2.59%). Members of the local trades can’t ignore the strong intraday drawdown of cost of oil futures. However, in the second half of the day, they are able to win back some of their intraday losses. This can be promoted by positive news from the ongoing OPEC meeting. Despite all the contradictions within the oil cartel, expect a decision on reducing the current total quota for production of liquid hydrocarbons.
The usual exception to its sector steel protective paper Surgutneftegaz-Pref (SNGSP RM, +1.44%). These dividend stocks are traditionally in demand in moments of abrupt fall of oil prices, accompanied by a trend towards weakening of the ruble.
Quite unexpected and paradoxical today looks only a significant increase in the value of shares Gazprom Neft (SIBN RM, +1.44%). The current interest in them is to maintain a favorable fundamental and technical factors. The net profit of the Issuer, in rubles according to IFRS for 9 months of 2018 increased by 58%. Nearest technical target and the resistance for these papers performs a significant price level was 400 RUB.
Currently, the index Mosberg managed to stabilize slightly above its intraday low, near the nearest important level of 2400. During the afternoon the US will release a large number of important statistics. However, their importance for the local stock market today pales into insignificance in comparison with the expectations of the outcome of the OPEC meeting. In addition, postponed to Thursday the weekly data on change of stocks of oil and oil products from the US Department of energy (19.00) will be held after the closing of the main trades in Russia.
Given these factors, we expect the prices of Masuri near the level of 2400 p., with a substantial decrease in the range of 1% to 2% by the end of the day.
Senior risk Manager,
IR “Algo Capital”