Translated material
Presidential auction
Obama and Medvedev caused mixed feelings among investors
The expectation of Barack Obama's victory in the race for the US presidency revived stock markets, and on Tuesday, American indices showed significant gains. Thanks to this, at the opening yesterday, Russian indices jumped by more than 10%. However, then the correction of Western markets and the speech of Russian President Dmitry Medvedev with his annual message to the Federal Assembly cooled the ardor of investors, and growth slowed to 3.42% on the RTS index and 1.08% on the MICEX.American stock indices closed with significant growth on Tuesday. At the end of trading, the Dow Jones index strengthened by 3.3%, to 9625.28 points. The S&P 500 closed up 4.1%. Markets pin significant hopes on Barack Obama's victory. As experts note, the election campaign was overshadowed by the extremely difficult situation in the economy, and this played into the hands of Barack Obama, since the main burden of responsibility for the mortgage crisis that erupted in the summer of 2007 lies with the Republican administration of George W. Bush. Investors expect that the new American administration will expand the program to stimulate the national economy. In particular, an additional package of economic stimulus measures worth $175 billion could be developed, which would provide for the introduction of tax breaks for US citizens and the creation of new jobs. The strongest American economists from the Bill Clinton administration will help the new president change the situation in the economy for the better; the support of the best American investor, billionaire Warren Buffett, is also important.
“We've seen the rally continue on Obama news around the world,” said Knight Equity Markets managing director Peter Kenny. -- It is obvious that the market was waiting for a fairly decisive vote in favor of change, Obama as president and a new path. The market was waiting for this and it turned out to be right.” "The market is breathing a sigh of relief now that the presidential race and the long period of waiting are over and the new president will now begin to deal with the existing economic problems," said Hargreaves Lansdown analyst Keith Bowman.
Coordinated actions of governments and central banks of the world's leading countries are beginning to have an impact on financial and credit markets, which is reflected in the growth of world stock indices and a decrease in the cost of credit in the interbank market. Thus, the three-month rates of Hong Kong and Singapore fell yesterday to 2.79% and 2.8%, respectively, the three-month rate of Japan fell to 0.791%, the lowest level since December 1999. The Japanese stock market closed higher on Wednesday, led by shares of financial companies and leading exporters. Mitsubishi UFJ Financial Group Inc added 10.79%, Mizuho Financial Group Inc - 16.1%, Sumitomo Mitsui Financial Group Inc - 11.89%. Thanks to the weakening of the yen, shares of leading Japanese exporters focused on the American market rose in price: automakers (Toyota Motor Corp - by 10.39%, Honda Motor Co - by 13.43%, Nissan Motor Co Ltd - by 13.38% ) and electronics manufacturers (Sony Corp - by 9.09%, Panasonic Corp - by 7.56% and NEC Corp - by 8.31%). At the end of trading, the Nikkei 225 index increased by 4.46%. MSCI's index of Asia-Pacific shares ex-Japan rose 1.82%, rising for a seventh straight session. Hong Kong's Hang Seng Index rose by 3.17%, China's Shanghai Composite Index by 3.16%.
The Russian stock market yesterday opened with rapid growth following global stock markets and oil prices. Among the growth leaders were securities of Norilsk Nickel, Sberbank and Gazprom Neft. By the middle of the trading day, stock indices rose by more than 10%. Because of this, at 11.05, trading in shares on the MICEX was suspended for one hour.
However, in the afternoon, many securities began to adjust under the pressure of external and internal factors, including negative dynamics in European markets and a decline at the opening of trading in America. As a result, by the end of the day the RTS index grew by 3.42% to 829.80 points, the MICEX index, where trading closed 45 minutes later, by 1.08% to 775.19 points. The growth leader was Sberbank - 8.04%.
As analysts note, an additional reason for profit-taking was the speech of President Dmitry Medvedev, who proposed increasing the presidential term to six years, and also spoke rather harshly about US foreign policy. “Despite the fact that the president spoke about activities without state supervision, and again mentioned the “nightmare” business, these are perceived only as declarations, and other, negative, signals are perceived more sharply,” notes a trader at a Russian investment company. “However, Mr. Medvedev did not say anything new regarding the West; he said before that the United States is to blame for the global crisis.”
“The behavior of world markets this week may be the most unpredictable, which will also have an impact on the dynamics of the Russian stock market,” says Ksenia Polyak, an analyst at Univer Investment Group. “In recent days, we have observed the rapid growth of the Russian market against the backdrop of the release of positive data on GDP in the United States, lowering interest rates by world central banks and a number of measures taken by the authorities to support the global financial system, however, the situation in the real sector of the economy has not yet improved.” . In this regard, Ms. Polyak believes that any negativity that comes from global markets could cause the same rapid decline as the growth during the last trading sessions. The head of the sales department of the Olma Investment Fund, Dmitry Lobanov, also gives a restrained assessment: “The growth in the market has not yet become sustainable - traders, judging by the nature of the trading, are not yet expecting a strong upward movement.”