Unsustainable growth

Microsoft raised Russian shares

The domestic stock market continued to grow, and the RTS index grew by 2.22% yesterday to 2012.76 points, and by 5.5% over the last two sessions. The MICEX index added 2.27%, rising to 1677.78 points. The reason for the upward movement was news about mergers in Western markets. However, analysts warn that it is too early to talk about sustainable growth: the American market, which declined yesterday, may pull the Russian market with it.

Global stock markets still completely control the mood of investors on Russian exchanges. News about mergers and acquisitions coming from the United States caused the Asian stock market to rise first early yesterday. Investors actively played on the message that Microsoft intends to buy the web portal Yahoo! for $44.6 billion. In addition, market participants were pleased with the Chinese aluminum producer Aluminum Corp of China (Chinalco) and the American group Alcoa, which acquired a 12 percent stake in Rio Tinto.

The Russian market began to grow following the Asian trading floors, consolidating the success achieved at the end of last week. “On Monday, there is an increase in the blue chip sector,” says Dmitry Roenko, head of the investment department of the Olma investment group. -- In Western countries, the period of publication of corporate reporting continues. Investors' concerns about the financial performance of individual companies may have been exaggerated, easing tensions on stock markets. Following the global stock indices, the RTS index also rose, having lost more than 10% since the beginning of the year without any significant reason.”

Shares of Norilsk Nickel jumped by 6.77% against the backdrop of the fact that the board of directors of MMC recognized the sale of non-core energy assets as advisable. Gazprom shares added 2.4%, LUKOIL - 1.83%, RAO UES - 0.94%. Sberbank shares looked worse than the market, losing 0.27%. “The weakness of the global financial sector is reflected in the Russian market in bank chips,” points out Nikolai Ruzaikin, an analyst at BCS Investment Company. It is too early to count on continued growth of the Russian market. At the opening of yesterday's trading session, American indices began to fall. The negative impact was caused by the decision of financial analysts to downgrade recommendations for shares of some companies in the financial sector. Thus, UBS downgraded its recommendation for shares of American Express Co, and Merrill Lynch for shares of Wachovia Corp, as a result of which the stock quotes of these companies lost 2.5 and 3.5%, respectively. As a result, in early trading the Dow Jones index fell by 0.3%, and the NASDAQ technology sector index fell by 0.17%.

According to Mr. Ruzaikin, since the US markets showed a half-percent minus at the close of the Russian trading session, fears are growing that sales on domestic markets will resume today. “According to technical analysis, it is premature to talk about sustainable growth,” says Mr. Roenko. “The RTS index can give a signal for growth by breaking through the local maximum of 2040 points.”

Nikolay KOCHELYAGIN