The focus may be on the updated strategy of the Moscow Exchange

Elena Kozhukhova, IC "VELES Capital" 27 September 2023 11:46

The external background on Wednesday morning can be called moderately positive. Oil prices are developing the recovery from local lows that began the day before, and sentiment on global stock markets has improved.

Trading on the US stock exchanges on the eve ended with a decline in the three main indices by 1.1-1.6%, led by the high-tech Nasdaq. The market reached lows since June, and the yield on 10-year US government bonds continued to update 16-year highs and remained above 4.55% amid expectations of higher Fed interest rates and investors' withdrawal from risk. Investors also feared that the government would be suspended if lawmakers failed to reach an agreement on its financing by October 1. At the same time, macroeconomic data published on Tuesday showed a drop in sales of new homes in the United States in August by 8.7% mom after an increase of 8% a month earlier, while the consumer confidence index in September decreased from 108.7 to 103 points (105.5 points were expected).

Futures for the S&P 500 index are adding about 0.4% in the morning as part of a rebound from local lows. On Wednesday, the market is waiting for data on the dynamics of orders for durable goods in the United States for August.

Trading in Europe on the eve ended with a decrease in the Euro Stoxx 50 index by 0.9%, which reached another low since March of this year. The data published on Wednesday morning at the same time showed a drop in the German GfK business climate index for October from -25.6 to -26.5 points (-26 points were expected). In the second half of the week, investors will wait for preliminary estimates of consumer inflation in Germany and the eurozone for September.

There is no uniform dynamics at trading in Asia in the morning. Japan's Nikkei 225 declined by less than 0.1%. The Australian ASX 200 lost 0.1%. Chinese indices, however, are adding about 0.5%. Hong Kong's Hang Seng is growing by 0.7%, retreating from the low reached the day before since November 2022. The fall in profits of China's industrial enterprises in August over the period from the beginning of the year, as data published today showed, slowed from 15.5% to 11.7% yoy, and in August profits jumped by 17.2% yoy.

The nearest futures for Brent and WTI crude oil are adding about 1% in the morning session after an increase the day before, when quotes retreated from the short-term supports of $90 and $87.50, respectively, as part of the correction (the area of the average Bollinger bands of the daily charts). Investors at the moment do not want to part with the short-term uptrend and bought futures from local lows. The report of the American Petroleum Institute at the same time showed an unexpected increase in reserves of "black gold" last week by 1.58 million barrels against the expected decrease in the indicator in today's report of the US Department of Energy by slightly more than 1 million barrels.

The Moscow Exchange and RTS indices rose 0.2% and 0.1%, respectively, on the eve, returning to the nearest resistance of 3050 points and 1000 points. The market continues to trade in the short-term range, but once again retreated from local lows and sought to restore positions, which may portend the development of an upward movement.

The ruble this morning on the Moscow Exchange is changing within 0.5% against the dollar, euro and Chinese yuan, being located at 96.50 rubles, 101.90 rubles and 13.18 rubles, respectively. 

At the beginning of the trading day, the Russian stock market may try to develop a recovery from local lows following an improvement in sentiment abroad and aim for the area of 3,100 points on the Moscow Stock Exchange index. In the middle of the week, the focus may be on the shares of the Moscow Stock Exchange itself, whose board of directors will consider an updated dividend policy and strategy. Taking into account the fact that in 2022 the Moscow Stock Exchange paid 30% of its net profit under IFRS as dividends, fixing a higher level of payments could be a local positive for the shares.

Elena Kozhukhova, Analyst of IC "VELES Capital" 

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