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Russian stocks shrug off weak oil prices, geopolitical factor

January 20, 2015, 13:07 UTC+3 MOSCOW

The Russian market was unaffected by weak oil prices, the unstable situation in eastern Ukraine and the IMF’s revised world economy forecast

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© Sergei Savostyanov/TASS

MOSCOW, January 20. /TASS/. Russian stock indices edged up on the Moscow Exchange on Tuesday after opening in negative territory, despite weak oil prices and increased tension over the situation in eastern Ukraine.

The ruble-denominated MICEX stock index fell by 0.13% from Monday’s close to 1,574.4 points on Tuesday by 10:40 Moscow time (07:40 GMT) but switched to growth by 12:15 Moscow time (09:15 GMT), rising by 0.7% to 1,587.44 points.

The dollar-denominated RTS index opened 0.32% lower on Tuesday at 764.09 points before paring losses and climbing 0.01% to 766.67 at the latest.

The Russian market was unaffected by weak oil prices failing to rise above $50 per barrel, the unstable situation in eastern Ukraine, a scene of fierce fighting between self-defense militia of the Donetsk People’s Republic and pro-Kiev forces lately, and the IMF’s revised world economy forecast, cutting global economic growth to 3.5% in 2015 and 3.7% next year.

China’s GDP growth statistics published on Tuesday may improve investor sentiment while market players closely watch oil price dynamics and the Ukraine developments.

“There are no grounds for strong movements on the market so far. Uncertain oil price dynamics and the risks for Russia to lose its investment-grade rating remain restraining factors for buyers,” analyst Anton Startsev at Olma brokerage said.

Weak oil prices failing to climb above $50 per barrel and considerable risks that S&P international rating agency may downgrade Russia’s sovereign rating to junk limit purchases on the market and broadly generate expectations of ruble stock price volatility, Promsvyazbank experts said.

Meanwhile, Zerich Capital brokerage analyst Andrey Vernikov said that Asian stock markets were demonstrating positive dynamics.

“The released statistics show that China’s GDP grew by 7.3% in the fourth quarter [slightly better than expected]. Retail sales in December also beat expectations,” he said.

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