Market Buzz: Underscoring a long and calm trading week

Russian stocks are expected to remain volatile on Friday. Overall, no major statistics are to be released, leaving traders in limbo at the end of an unusually long six day trading session.

“Generally, the situation looks quite unstable. Growth might be replaced by decline at any moment,” says Pavel Emelyantsev, an analyst at Investcafe.

Veles Capital analysts said “…there will be no important stats, meaning no references.” However, positive US news that came out late on Thursday “might support the further upping of the risky assets’ quotes,” the analysts concluded.

Thursday trading on the Russian stock floor was mixed. The Russian stock market hit a year high on the RTS and the MICEX thanks to positive signals from the US, only to lose ground as players started fixing a profit by the close of Thursday’s session. The RTS gained 0.15% to reach 1,754.67 points, while the MICEX lost 0.28% to stand at 1, 626.63.

That happened because “the investors perfectly understood that there were no triggers, that’s why they decided not to take up risks and started to gradually fix the profits,” Kirill Markin of Investcafe explained.

Russia’s banking giants Sberbank and VTB were the biggest losers, with Sberbank shares going down 2.5%, and VTB – 0.4%. The second largest bank VTB went down on its weak RAS financial report to Russian Accounting Standards, Veles Capital explained. VTB’s net profit for 2M12 dropped 68% year on year to 4 bn rubles.

US producers said on Thursday their prices grew 0.4% in February, which was below the expected growth of 0.5%. Jobless claims data was also optimistic, as the number dropped 14,000 during the week, while a general forecast was a 5,000 decline.

“It’s clear that the weekly data isn’t too indicative, however, if the tendency continues, this will point to an improvement in the labor market of the world’s biggest economy,” Pavel Emelyantsev, an analyst at Investcafe, explained.

In the USA all major indices grew on Thursday, with the SP 500 topping 1,400 -the highest level since June 2008, the Dow Jones Industrial average going up 0.3% to 13,226.49 and The NASDAQ Composite Index up 0.41%, at 3,053.18.

Europe was also up, with The Stoxx Europe 600 edging up 0.3% at 270.98, Germany’s DAX adding 0.9% to 7144.45, and France’s CAC-40 index closing Thursday session 0.4% higher at 3580.21.

The UK’s FTSE 100 underperformed its peers and was down 0.1% to 5940.72. That’s after Fitch Ratings cut the country’s outlook to negative, saying UK financial flexibility was “very limited.”

Asian trading was mixed, as Japan’s Nikkei 225 was up 0.7% to 10,123.28 — the highest close since late July. Hong Kong’s Hang Seng increased 0.2% to 21,353.53. However, the benchmark Shanghai Composite shed 0.7% to 2,373.77 and the Shenzhen Composite Index dropped 0.8% to 960.96.

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