The Russian stock market went down yesterday morning. From the previous closing level (according to the Moscow Exchange Index 2), losses reached about 1.6%, but by the close of trading, a significant part of the decline had been redeemed, and the benchmark sank by only 0.4%.
Correction attempts have been observed for the third day, but so far they have not ended. In part, intraday bounces are helped by dividends coming into investors' accounts. In addition, those who did not have time to buy the market at the bottom are afraid of being late to earn money. It seems that these resources for buying drawdowns are running out.
Overall, we see no reason for continued growth. But the risks are high. This is not only about geopolitics, but also the upcoming Duma elections, which may bring nervousness to the markets, as well as the draft budget, which the Ministry of Finance may present as early as September.
Oil partially helped to avoid a correction, which rose by 4.6% yesterday. The United States has already lost oil from Saudi Arabia due to the closure of the Strait of Hormuz. Iran is considering the possibility of banning ships with goods for the United States and Israel from passing through this bottleneck until the latter compensate for the damage caused to the Islamic Republic. It is difficult to say whether the United States and Israel will accept this or launch a new military campaign.
In general, the situation with oil prices is unpredictable now. It is better to trade it according to the trend and within the day.
As expected, the oil industry grew on the rebound, where the not very liquid shares of Russneft were the best (+6.6%). But the growth of Rosneft (which usually strongly correlates with the price of its products) by only 1.1% may indicate a decrease in the level of general optimism.
On the risk of increased conflict, gold stopped rising yesterday, but this morning it is rising in price again - by 0.8%. The technical picture for this asset calls for purchases, but there are risks of quotes leaving 4,000 dollars per ounce with a new escalation of the situation in the Middle East.
Eurotrans shares fell by 11.4%. The stock market was very late in playing out the full-fledged default of this bond issuer, which opens the way to bankruptcy.
The ruble's weakening accelerated somewhat unexpectedly. By the end of Thursday, the yuan-ruble pair rose by 0.75% and closed the day above the resistance of 12. This was probably due to an increase in demand for foreign currency from imports, but not a decrease in its flow into the country. The technical overbought position of the pair is starting to increase, and its correction cannot be ruled out. However, it looks safer to trade this instrument from a long position.
Andrey Zatsepin, Chief Analyst at ALOR BROKER.
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