The growth of the stock market is still a technical rebound


Yesterday, the Russian stock market added just over a percent on a neutral external background. The geopolitical situation has calmed down somewhat, according to media reports, the President of Ukraine requested a telephone conversation with his Russian counterpart, which can be regarded as evidence of the fears of the Ukrainian authorities to launch a full-scale military campaign in Donetsk and Luhansk regions. It seems that the Ukrainian leader is looking for a way to get out of this situation without political losses.

Naturally, this could not affect the stock market, which rebounded by a percentage of the strong support of 3500 points: this is not only a psychologically important level, but the lower border of a narrowing ascending corridor still lies here.

The leaders of growth were shares of metallurgists, which gained more than 4%. The papers are pushing up the world steel prices and the weak ruble. MMC Norilsk Nickel shares were supported by the company published a good clarifying forecast for the production of metals this year. It is possible that today there will be attempts to fix yesterday’s profit on sector securities. But in the medium term, they look very attractive.

The same cannot be said for companies focused on the domestic market. The ruble’s lack of chances to strengthen, coupled with the authorities’ attempts to contain the rise in prices by administrative measures, worsen the growth potential of shares of issuers in this direction.

In general, it is too early to rejoice. We regard yesterday’s growth only as a technical rebound. Sales can return to the market at any time when new threats emerge or old threats intensify.

The external background is becoming neutral today: American futures continue to consolidate near historic highs with a risk of decline, oil is growing, but almost all industrial and precious metals are declining. Therefore, we are waiting for the opening of trades not far from yesterday’s closing level.

We recommend paying attention to oil stocks. They have strongly corrected recently, and one can expect an overflow of speculative demand in them. The fundamentally undervalued Rosneft looks the most promising.

We are also positively looking at Sberbank: it’s time to play back the bank’s brilliant reporting for March and the first quarter, as well as recall the approaching cut-off of the register for dividends, because Sberbank traditionally quickly closes the dividend gap.

The slump in political tension did not affect the ruble. Now internal negative fundamental factors are beginning to act on it – this is a reduction in the balance of payments of the Russian Federation. In the coming months, one can expect an outstripping growth in imports, and it is possible that the surplus in the balance of payments will be “eaten up” by the purchase of foreign currency for the National Welfare Fund.

Therefore, buying the ruble against the dollar is dangerous even speculatively. If negative factors appear, the dollar-ruble pair will quickly go above 78.

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