Translated material
Autumn exacerbation
The RTS index updated its historical maximum for the second time in a week
The Russian stock market managed to end the past week on a positive note. At closing on Friday, the RTS index set a historical high, consolidating above 2110 points. One of the main growth factors was positive statistics from the US employment market, which turned out to be significantly better than forecasts. On Monday, American investors are resting to celebrate Columbus Day, and the dynamics of Russian stocks, as analysts predict, may no longer be so positive.After a two-day negative correction amid increased volatility, the domestic stock market rose on Friday by 1.21%, to 2115.43 points on the RTS index. The MICEX index increased by 1.39% to 1802.45 points.
The growth of Russian blue chips was evident from the very beginning of Friday trading due to positive dynamics on Asian and European markets, as well as an increase in oil prices. The second wave of soaring prices for Russian securities occurred in the evening, when data from the US labor market became known. The number of people employed in the American economy, excluding the agricultural sector, increased by 110 thousand people in September, with a forecast of 100 thousand.
As you know, unemployment data was considered one of the reasons that prompted the Federal Reserve to lower its benchmark interest rate by 0.5 percentage points at its meeting on September 18. After the release of positive statistics, futures quotes for a further reduction in interest rates in the United States decreased. November futures for the rate amounted to a 52% probability of its reduction by 0.25% in October, while before the release of statistics this probability was estimated at 72%.
US President George W. Bush spoke to reporters after the publication of statistical data on Friday and said that he was pleased with the economic news. "This is good news for the people of our country because it means our economy is vibrant and strong," Mr. Bush said. "But I don't accept good news without evidence," he added, repeating his call for Congress to keep taxes low to boost economic growth.
The American stock market opened on Friday with significant gains. In early trading, the blue-chip Dow Jones index rose 0.53% to 14,048.77 points, and the Nasdaq technology sector index rose 0.87% to 2,757.31 points.
At the end of the trading session in Russia, the majority of securities showed growth above 1%. Shares of LUKOIL rose by 3.09%, Gazprom by 1.85%, and RAO UES by 0.84%. Sberbank securities were able to recover by 1.36% after falling on Thursday, caused by rumors about the resignation of bank president Andrei Kazmin.
“External factors favored the growth of the Russian market,” notes Vladimir Detinich, head of the analytical department of the Olma Investment Fund. “There was a revival on many world stock exchanges, and the oil market also resumed its rise.”
According to Promsvyazbank analyst Oleg Shagov, the most positive impact on the RTS index was the rise in share prices of Gazprom and LUKOIL. The rise in prices for LUKOIL shares was supported by the company’s plans announced by management to invest about $1.5 billion in the development of LUKOIL-Nizhegorodnefteorgsintez, as well as by an increase in oil prices that occurred after the publication of data on gas reserves in the United States, which turned out to be less than the market expected , says the analyst.
Norilsk Nickel shares moved against the market on Friday (-1.84%). Oleg Shagov explains this by profit-taking by players after the release of the company’s IFRS report for the first half of the year, which was weaker than the market expected. “In addition, the negative dynamics of Norilsk Nickel share prices was supported by a decrease in nickel prices on world commodity markets,” adds Mr. Shagov.
Alexander Potavin, head of the analytics department at Antanta Capital Investment Company, believes that due to the holiday in the United States, today’s trading on the Russian market “will almost certainly not have any clear dynamics.”