The Russian stock market managed to grow again yesterday, adding 0.3% according to the Moscow Exchange Index. However, it was not possible to hold above 3900 points – as in the previous day, oil began to decline in the second half of Wednesday, reducing the overall appetite for risk. Only the growing American indices did not allow the Moscow Exchange Index to go into negative territory.
The oil drawdown is understandable. First, a correction is needed after a strong growth. Secondly, the market continues to be pressed by uncertainty in the internal relations of OPEC +. On the one hand, the absence of a compromise gives hope that the production level will not be increased from August. On the other hand, the risks of the collapse of the cartel and the start of uncontrolled production are ripening, which will drive quotations to the region of $ 50 per barrel, or even lower. However, the second option is less likely, we still expect that the countries, taught by last year’s oil collapse, will be able to come to an agreement.
In the meantime, oil continues to decline slightly in the morning.
It is highly probable that the growth of oil will stop for several days, which will provoke a slight correction of the Russian stock market, which is now trading at a strong resistance, which is the upper border of the ascending channel.
Oversold shares of ferrous metallurgy companies took advantage of the rise in prices for their products yesterday. So far, there is no need to talk about the formation of an uptrend or the continuation of a rebound on them.
The main threat to raw materials comes from the rising dollar. The euro-dollar pair is now trying to hold the 1.18 mark. But it is not a fact that it will work out – the previous rebound with an attempt to go above 1.19 failed, and this gave strength to the dollar “bulls”.
Today, the strong dollar has dragged industrial and precious metals into the “red” zone, and American futures are losing a quarter of a percent. So in the first half of the day, we can expect the market to decline within 0.5%. If new positive news does not come to the market, profit-taking on Russian shares will intensify.
Speculatively, you can try to make money on shorts for Rosneft and Norilsk Nickel.
It is difficult to say when to buy securities on the rebound.
The dollar-ruble pair closed yesterday’s trading just above the resistance of 74.6. One can forget about any serious strengthening of the ruble until the inflow of oil and gas currency is withdrawn into the bottomless National Welfare Fund.
However, we expect that support for the ruble, at least with verbal interventions, will start to be provided by the monetary authorities, which, on the eve of the Duma elections, need to keep the “wooden” one from falling sharply, which, moreover, will provoke another round of inflation.
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