July 3 (Finam) -- Russian equities retreated Thursday on falling oil prices and downbeat US economic data fueled negativity in the second half of the session, with the RTS Index losing 1.79% and the MICEX Index plunging 3.50%.
A contraction in oil futures dragged down domestic oil and gas names, as Gazprom sagged 5%, Rosneft tumbled 3% and Lukoil declined 3.6%. Banking issuers dropped in line with the market, with Sberbank giving up 4.1% and VTB pulling back 3.3%. Steels were mixed, but outperformed intraday on expectations China’s demand for steel would grow and favorable metal prices, as MMK edged down 0.3%, NLMK rallied 5.1% and Severstal dipped 0.3%.
Bearish sentiment prevailed in US trading Thursday, with the S&P 500 Index taking a 2.9% drop. Market players were disappointed by unemployment data showing a much higher-than-expected decline in US jobs. Against this backdrop Asian indices are heading south now. US jobless data also exerted an adverse impact on crude prices, with Brent contracts currently hovering around USD 66.50 per barrel.
We think Friday morning’s news flow is unfavorable for the Russian stock market and the benchmarks are likely to gap down at the open. An uptrend in US index futures could slightly buoy the market, but falling oil prices will put heavier pressure on O&G names. As for the market drivers, we’d like to highlight EU retail sales numbers due out at 1.00 pm Moscow time. As American exchanges are closed for Independence Day celebrations today, domestic trading floors will finish the week without an important benchmark. |
