A sharp drop in the oil price failed to dent the Russian equity markets but analysts say that the year's peak could have already passed.
Brent Crude tumbled $5.50 a barrel over Wednesday and Thursday last week causing the RTS to fall 2.3 per cent in the second half of last week.
"Both the rouble and Russian stocks performed amazingly robustly so my sense is that it isn't going to last," Ivan Ivanchenko, equities analyst at VTB Capital, said in a telephone interview.
Energy stocks also showed some resistance, with Russia's largest private oil company, LUKoil, shedding 4.3 per cent in two days. Investors, however, continue to warn that a correction is due following the exchanges' impressive performance this year.
"After such a strong gain over the past six months and uncertainty over the strength of medium-term earnings growth, traders may be more inclined towards profit-taking than in raising market exposure," UralSib's chief analyst Chris Weafer wrote in a note to investors.
Russian markets continue to follow international trends with the MICEX 0.7 per cent lower by 2 pm Monday, imitating similar losses across Asia.
Investors will be looking for support from the US after a mixed week with consumer confidence data improving at the same time as home and durable goods sales failed to meet expectations. Analysts are now beginning to question whether big-spending Americans can lead the world out of the crisis.
"The US consumer is not the leading force of [global growth] because they are still overdebted," said Ivanchenko. "My real concern is that global growth is not going to be that robust ... so I would expect that we have seen highs for the year."
US unemployment data out on Friday will give market players more evidence about which direction the world economy is heading in. Economists predict a fall in the number of job losses but a 0.1 per cent increase in the level of unemployment.
"A big miss either way will likely have an immediate influence on the markets this week," wrote Weafer.
Russia's economic fortunes remain a cause for concern after recording a 10.5 per cent year-on-year GDP contraction in August, while little support is expected from the commodities market after copper fell 1.9 per cent last week.
The rouble also managed to maintain its strength despite the hit to oil prices thanks to high demand for the currency from domestic companies.
"There were an enormous amount of tax payments last week and that was supportive for the rouble," said Ivanchenko.
No comments:
Post a Comment