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Grim outlook for Russian stocks due to geopolitical tensions, weak ruble

November 06, 2014, 10:28 UTC+3 MOSCOW
The ruble keeps hitting historical lows against the US dollar and the euro amid sanctions, falling oil prices
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© Sergei Savostyanov/TASS

MOSCOW, November 6. /TASS/. Russian stocks are likely to fall at Thursday opening hit by a weak ruble and rising geopolitical tensions, which indicate that sanctions will be continued until mid-2015, analysts said.

“German Chancellor Angela Merkel said the elections held on November 2 in Ukraine’s separatist regions strengthen Western leaders’ intention to keep the sanction regime,” Andrei Vernikov, Zerich Capital deputy CEO, said.

“The west is threatening with new sanctions over worsening situation on Ukraine’s east. Oil prices continue falling due to Saudi Arabia’s decision to cut prices for American buyers…and the ruble keeps hitting historical lows against the US dollar and the euro,” Andrei Dirgin, head of Alfa-Forex analytic department, said.

On Wednesday, the ruble plunged 1.34 rubles against the US dollar to 44.95 and 1.58 against the euro to 56.08.

Brent oil prices gained 0.18% to US $83.10 per barrel prior to the opening of the trading session, but they had already lost about 3.5% since the beginning of the month. If the US dollar continues to strengthen, the price can fall below $80 per barrel, Ilya Frolov, analyst at Promsvyazbank, said.

Investors will closely watch for todays’ announcements of the result of the European Central Bank’s meeting on monetary policy, UK’s industrial output data, Germany’s industrial orders, US’ jobless claims and agricultural output statistics.

Infographics Economical sanctions against Russia Economical sanctions against Russia
The USA, EU, Canada and Australia have introduced sanctions against Russia over its involvement in the Ukrainian crisis. Infographics by ITAR-TASS

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