Russian benchmark shares started with gains as part of an upward correction after sharp drop on Tuesday, on the back of massive asset sales following economic and political concerns.
The RTS and MICEX indexes increased by 0.2%-0.6% in the first minute of trading. Ilya Fedotov, Head of analytics at Veles Capital believes today markets could “win the Tuesday loss back. Support will come from high prices on oil (being kept up by the tension in the Middle East). Positive news might be expected on the Thursday session of the ECB.”
Analysts from Alor say the news from Greece contributed to positive start of the day. “The Greek Parliament has finally approved a cost saving budget for next year. The decision was to cut budget deficit to 5.4% of GDP which allows the next bailout tranche to be approved. The news supported the demand for risky assets,”experts say.
The correction came after Tuesday’s global indices dropped on the back of news of Standard Poors warning of a ratings downgrade for 15 Eurozone states. This would include Germany and France if the EU leaders don’t come to a consensus over fiscal problems within the union.
The moves “are prompted by our belief that systemic stresses in the euro zone have risen in recent weeks to the extent that they now put downward pressure on the credit standing of the euro zone as a whole,” SP said.
Leading European and U.S. stock indices traded sideways on Tuesday with the German DAX loosing 1.27%, the French CAC 40 slid 0,5% and the London FTSE 100 lost 1%. Russian core indices fell further during the day due to the negative reaction to the parliamentary elections. The MICEX lost almost 4% and RTS closed the day with losses of almost 5%.
Today investors will pay attention to macroeconomic figures which could affect trade on the markets, says Oleg Shagov head of analytics at Promsvyazbank. “As usual, PMI data from Great Britain and Germany will be of major concern today. Above all, investors are expecting US Mortgage data release.” Ultimately, the meeting of the 27 European Union leaders in Brussels on Friday where proposals for tougher fiscal rules and treaty changes will be discussed will shed some light on next week’s market behavior.