Translated material
Slipped on oil
The RTS index did not reach 2100 points
The RTS index has not yet managed to overcome the psychologically important barrier of 2100 points. After record growth on Monday, yesterday the value of Russian blue chips fell by an average of 2-5%. The main reason is the fall in oil prices. The mood of domestic investors was also affected by the unfavorable dynamics of world markets. As a result, the RTS index fell by 1.97%, from 2091 to 2050 points, the MICEX index by 2.23%, from 1806.32 to 1766.92 points. Analysts note that a correction is possible in the near future, which will depend on the dynamics of oil prices and reports from Western oil companies.Almost all leading securities were in the red: shares of Gazprom fell by 2.79%, LUKOIL - by 2.5%, Rosneft - by 2.14%, Surgutneftegaz - by 4.47%, RAO UES of Russia - by 2.68%, Sberbank - by 2.71%. Norilsk Nickel shares looked better yesterday, losing only 0.09% in price. Experts note that this happened against the backdrop of reports that the company's net profit for the first quarter increased to $1.82 billion, which makes it one of the most efficient in its industry.
“The decline in Russian stock indices is primarily due to the fall in stock prices of companies in the domestic oil sector,” notes Promsvyazbank analyst Oleg Shagov. -- Oil prices fell to a one-week low on expectations of rising fuel inventories in the United States. The decline in quotations was also influenced by unofficial statements by OPEC representatives about a fair oil price of 60-65 dollars per barrel for both producers and consumers, and about their readiness to increase supplies if necessary. Yesterday, Brent oil fell in price by 2%, from 79.4 to 77.8 dollars per barrel. In addition, the expert continues, stock prices of oil companies were negatively affected by the report of British BP, whose profits fell in the second quarter.
European indices, having fallen yesterday, also did not reassure investors. This was due to the release of data on activity indices in the manufacturing and services sectors of the eurozone, which indicated a significant slowdown in growth in July, Mr. Shagov points out. The report on industrial production in Great Britain also turned out to be unsuccessful; its index in July fell to its lowest level since November 2006. In addition, the European stock market was negatively affected by financial reports of companies, which turned out to be worse than market expectations.
The American stock market also opened lower yesterday amid investor dissatisfaction with DuPont Co.'s results. and Texas Instruments Inc., raising concerns about the health of the economy and the impact of the housing crisis. Apple Inc. shares fell about 4.5% after AT&T Inc. reported disappointing market data on the number of activations of the new Apple iPhone. Texas Instruments Inc. reported late Monday that second-quarter profit fell due to weak demand for calculators and other products and issued third-quarter financial guidance that fell short of analysts' expectations. By the opening bell, the blue-chip Dow Jones index fell 0.68%, and the NASDAQ technology sector index fell 0.67%.
However, despite the negative events, market participants are full of optimism. “Indices of emerging markets continue to grow,” notes Olma Investment Fund analyst Anton Startsev. -- Technical analysis data indicates the possibility of a renewed rise in the Russian market. Interest in certain highly liquid securities remains.”
Mr. Shagov notes that investors are looking forward to reports from American oil giants: ConocoPhillips (today) and ExxonMobil (tomorrow). “The upcoming financial report of ConocoPhillips, which controls 20% of LUKOIL shares, will traditionally be of interest to investors with estimates of the Russian company’s net profit,” the analyst points out.