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Russian stock indices up on Wednesday following Putin-Biden talks

By the end of the trading session, the ruble-denominated MOEX index rose 0.19%

MOSCOW, June 16. /TASS/. The Russian stock market continued to grow on Wednesday. In addition to the rise in oil prices, the meeting of the Presidents of Russia and the United States, Vladimir Putin and Joe Biden, also made a positive contribution.

By the end of the trading session, the ruble-denominated MOEX index rose 0.19% to 3,829.67 points, the dollar-denominated RTS index went up by 0.82%, to 1,679.02 points.

As of 7:48 pm Moscow time, the dollar-to-ruble rate decreased by 0.21%, to 71.96 rubles. The euro-to-ruble rate fell by 0.37%, to 87.17 rubles.

Domestic assets received support from the growth of oil prices - the price of a futures contract for Brent crude exceeded $74 per barrel.

"Oil continued to grow towards $75 amid positive forecasts for demand and API and EIA data on oil and oil products reserves," said Alexander Bakhtin, investment strategist at BCS World of Investments. The upcoming meeting of the US Federal Reserve today creates uncertainty.

 

Meeting of Russian and US leaders supports market

 

The agreements reached during the meeting of the presidents of Russia and the United States in Geneva were another positive factor.

"The meeting of the leaders of the two countries brought a number of results. Thus, the parties agreed that the ambassadors of Russia and the United States would return to the embassies in Moscow and Washington. Also, the heads of state reached a decision to extend the START-3 treaty, consultations will continue at the interdepartmental level," Bakhtin noted.

According to the analyst, despite the persistence of contradictions on many issues, the above agreements mark progress in bilateral relations, and for Russian assets, the results of the Geneva summit can be considered moderately positive.

According to Freedom Finance analyst Alexander Osin the positive factors may lead to further growth of the MOEX index.

 

Stock market

 

The oil and gas sector was the driving force of the Russian stock market on Wednesday, as purchases were driven by high oil prices. The leaders are the shares of the following companies: Gazprom Neft (+2.4%), Lukoil (+1.8%); Novatek (+2%); Rosneft: (+1.5%) and Tatneft - ordinary shares (+1.8%) and preferred (+1.3%), says Vladimir Lyashchuk, chief analyst at PSB.

In the financial sector, shares of Sberbank - ordinary (+ 0.3%) and preferred (+ 0.4%) - are growing, reflecting an improved attitude of investors towards Russian shares and trying to close the dividend gap, the expert added.

At the same time, shares of steel companies (NLMK: -1.5%; Severstal: -1.4%) are falling following the release of statistics on industrial production in China, which turned out to be worse than expected, which may be a sign of weakening demand for metals. MMK shares lost 3.6% after the dividend cut-off, Lyashchuk adds.

 

Forecast for tomorrow

 

On Thursday, the markets will play out the results of the Fed meeting and the results of the meeting between Putin and Biden. Also tomorrow the fate of key rates will be decided by the regulators of Brazil, Egypt, Indonesia, Norway, Switzerland, Turkey, Bakhtin said.

According to estimates by BCS World of Investments, the MOEX index on Thursday will be in the range of 3,760-3,880 points, the ruble-to-dollar rate will be in the range of 71-73 rubles.

According to Freedom Finance estimates, the target range of the MOEX index at the end of the week will be 3,780-3,850 points, the dollar and euro rates against the ruble will be 71.3-73.5 rubles and 86.1-88 rubles respectively.