The geopolitical background for the Russian market has improved

The external background on Monday morning can be called ambiguous. Sentiment abroad improved, and Brent oil prices moved lower after surging higher on Friday. Gold quotes continue to consolidate at $4,200/oz.

Trading on the US stock exchanges on Friday ended with a 0.3-2.1% decline in the three main indexes, led by the high-tech Nasdaq, which showed the worst result, including for the entire week. At the same time, the Dow Jones Industrial Average has been feeling better than the "broad market" in recent days, trying to play off the weakness of previous weeks. Investors remained cautious after the release earlier in the week of significantly higher-than-expected data on US consumer and manufacturing inflation for September, although most participants still do not expect the Fed to raise interest rates at its October meeting. Investors also continue to doubt the justification of large-scale investments in the AI sector, which contribute, among other things, to the growth of corporate debts.

Futures for the S&P 500 index are adding about 0.8% in the morning, trying to recover from last week's weakness. In the coming days, investors will evaluate, among other things, the quarterly results of IT giants such as Tesla, IBM and Meta. Netflix's reporting is also of particular interest to the market.

Trading on European stock exchanges on Friday ended with a 0.5% increase in the Euro Stoxx 50 index, which retreated from the short-term resistance of 6230 points during the day. In the context of high energy prices, the indicator remains weak in the medium term, although it shows resistance to sales in the global IT sector, whose share in regional economies is not so significant.  

Positive dynamics prevailed at trading in Asia in the morning against the background of improving sentiment in the United States. Japan's Nikkei 225 was an exception and fell by 0.45%. The Australian ASX 200 increased by 0.5%. Chinese indices are rising within 0.5%. The macroeconomic data published on Monday mostly turned out to be better than forecasts and showed, in particular, the expansion of China's GDP in the third quarter by 4.5% yoy and 1.2% q/q, an acceleration in industrial production growth in September to 5.5% yoy, and retail sales to 1.1% yoy. Investments in fixed assets decreased by 7.2% YoY, the same as a month earlier. Hong Kong stock exchanges are closed for the weekend. The South Korean KOSPI is growing by 1.7%.

December Brent crude futures are losing about 2.5% in the morning after jumping up by almost 4% on Friday, when quotes reached $110/bbl, the highest since May this year, amid continuing concerns about a more limited global supply. At the beginning of the new week, sales are observed after the postponement of the introduction of a large-scale package of US sanctions against the Russian energy industry, as well as new Iranian proposals to open the Strait of Hormuz. The tension in the Middle East, however, remains the main bullish factor for prices, and the stabilization of quotations above $ 110 will set the next target for movement in the area of $113-$115/bbl.

The Moscow Exchange and RTS indices rose by 1.65% and 1.82%, respectively, on Friday. The dollar indicator, thanks to the support of the strong ruble, has been updating its peaks since the beginning of July and is stabilizing above the resistance of 920 points with a possible next target of 940 points. The ruble index of the Moscow Exchange is at the resistance of 2460 points with the prospect of testing 2500 points with further improvement in fundamental signals.

The ruble against the yuan on the Moscow Stock Exchange on Friday strengthened by 0.3% to 12.44 rubles, ending the week not far from last month's peak of 12.32 rubles.. The official exchange rates of the dollar and euro of the Central Bank of the Russian Federation amounted to 83.61 rubles and 93.71 rubles, respectively (against 83.76 rubles and 93.76 rubles on the previous business day), reflecting the restrained growth of the ruble against both currencies.

At the beginning of the main trading session, the Russian stock market is set to grow and will receive support from the postponement of the introduction of a large-scale package of US anti-Russian sanctions, which primarily affects the energy sector. In addition, information appeared in the Western media about proposals to include in a potential peace agreement on Ukraine a clause on the resumption of Russian gas supplies to Europe. At the same time, the leaders of the Russian Federation, the United States and China, according to sources, may also hold a trilateral meeting at the APEC summit in November to discuss the Ukrainian crisis. The geopolitical background for the Russian market has thus improved somewhat, which may allow stocks to move higher even if the Central Bank of the Russian Federation decides to keep the key rate at 14% at Friday's meeting. Investors are also paying attention to the dividend stories and are waiting for new announcements about payments for the first 9 months of the current year.