Daily Review. 22nd August, 2007

The Russian stock market regained Tuesdays losses on Wednesday and drifted north following an upturn on the international stock markets driven by stronger investor expectations of a possible interest rate cut at the Feds September meeting after Tuesdays meeting of the US monetary authorities devoted to the liquidity problem on lending markets. As a result of bullish investor sentiment, European stock markets climbed and the US equity market kicked off in the black which enabled the Russian stock market to resume modest growth, although crude prices retreated. The RTS Index climbed 1.82% to 1,853.77 and the MICEX Index advanced 1.64% to 1,632.99. The price of Brent crude dropped below $69 a barrel. However, an upward correction shaped up on Wednesday as a result of which Russian oil and gas shares closed in positive territory on MICEX. Surgutneftegaz rose 2.21%, Gazprom climbed 1.80%, Rosneft closed 1.71% higher, Lukoil added 1.71%, Tatneft grew 1.39% and Gazprom Neft gained 0.96%. The US mid-week inventory report was mixed. The US Department of Energy said in the weekly report released Wednesday that commercial crude stockpiles showed a build of 1.89 mln bbl and distillates rose by 1.36 mln bbl. Meanwhile, gasoline stockpiles plunged by 5.71 mln bbl. The data released depressed crude futures. However, oil prices regained losses further down the road. NorNickel was a top gainer on MICEX (+2.61%) on a 4% rise in nickel prices on the London Metal Exchange. On the second-tier front, Severstal surged 4.62% and MMK gained 2.87%. Bank shares posted gains, with Sberbank surging 2.41% and VTB soaring 3.46%. UES was among the top decliners on MICEX (-0.18%) on greater uncertainty about technicalities related to the power holdings restructuring. Other MICEX blue chips landed as follows: Rostelecom inched down 0.10% and MTS climbed 2.22%. Market turnover amounted to $46.45 mln on benchmark RTS and picked up to $7,902.87 mln on MICEX.

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[Source: Russian Stock Market Blog]