Fears about a crisis evolving on the US lending market exerted an adverse impact on yesterdays trading in the United States, with stock indexes finishing in the red. European indexes also headed south and Asian exchanges followed suit. The wave of downside has also affected commodity stocks. Pessimistic trading sentiments on the Russian market were attributable to an extremely unfavorable news flow ahead of its opening bell.
In the morning Russian equities kicked off with a downswing across the board. Liquid names drifted lower in the first hour of trading, with financial stocks (led by Sberbank commons and prefs) suffering heaviest losses, but later papers rebounded after 11:30 am, dragging some stocks into the black. Telecoms has been outperforming the market after a modest drop and now trading in positive territory for a third consecutive hour.
As of 1:00 pm Moscow time the RTS Index was down 1.37% and the MICEX Index dropped 1.2%. On the blue-chip front, SurgutNG commons and prefs jumped 1.14% and 0.19%, Rostelecom gained 0.54%, Uralsvyazinform advanced 0.27%, Tatneft added 0.65% and Rosneft climbed 0.55%. On the downside, Lukoil dipped 1.55%, Norilsk Nickel tumbled 1.9% and Gazprom pulled back 1.61%. Sberbanks commons and prefs were the weakest stocks, down 2.38% and 2.54%, respectively.
The market seems to be relying on external factors. Investors are no hurry to launch long positions, placing sell orders with the arrival of negative news. Market players are cautious against the backdrop of global equity weakness.
Sergey Dorogavtsev, Asset Manager, Finam Investment Company
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[Source: Russian Stock Market Blog]
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