Oil weakness and strong ruble will test the market again | November 21, 2023

Source: Freepik

The external background before the start of trading in Russia is neutral. On the one hand, the Chinese market is growing in hopes of stimulus, which is positive for Russian stocks. On the other hand, forecasts for other economies are not yet optimistic amid constant statements by representatives of central banks that high rates are here to stay. Oil failed to continue rising as policy tightening expectations OPEC+ conflict with forecasts of real demand. Against this background, it will be difficult for the Russian market to show growth. In addition, the ruble continues to strengthen and is ready to reach the level of 88.0 per dollar.

The Russian market closed Monday’s trading neutrally. The strengthening of the ruble did not allow the Moscow Exchange Index to grow, and positive corporate news and rising oil prices did not allow the decline to develop. “Sovcomflot” published a good report. OZON is making plans to change jurisdiction. Volume of transactions on the main section Moscow Exchange amounted to 39.389 billion rubles.

At the end of trading on November 20, the Moscow Exchange Index was 3207.36 points (+0.03%), and the RTS Index was 1142.51 points (+1.82%).

1 AGRO-gdr 1,559.8 6.33% 23:49:58.

2 OZON-address 2 853 3.52% 23:49:58.

3 iPositive 2 112.8 2.36% 23:49:26.

4 MKPAO “VK” 628.8 2.28% 23:49:52.

5 Polymetal 540 2.06% 23:49:41.

Leaders of decline:

1 PIK ao 696.7 −1.46% 23:49:51.

2 SevSt-ao 1,332.4 −1.38% 23:49:57.

3 NLMK JSC 187.78 −1.33% 23:49:20.

4 GLTR-gdr 637 −0.99% 23:49:40.

5 Surgnfgz-p 58.47 −0.9% 23:49:51.

4 sectoral indices of the Russian market ended the day in the red, and 6 closed trading in the positive. The consumption sector showed the greatest growth (+1.76%). The largest decline was in metals and mining (+0.69%).

The main idea of ​​the day was the ruble. In the first hours, its dynamics turned out to be very sluggish, but then it began to actively strengthen. The dollar fell to 88.135, the euro to 96.285, and the yuan to 12.263 rubles. The main thing is that the next level, which some analysts noted, has been passed.

After reaching 88.5, the path opens to 85.0 rubles, or even 82.0-83.0 per dollar. Some aggressive forecasts predict this movement before the end of this month. However, the conditions for strengthening the ruble remain the same: mandatory sale of currency by exporters, the Central Bank of the Russian Federation rate at 15.0%, preparation for tax payments and the absence of significant demand from foreign businesses leaving the Russian Federation. In the range of 80.0−85.0, one can already expect a softening of the conditions for the sale of foreign currency earnings.

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The oil and gas sector closed the day with a slight decline. However, we note that the shares “NOVATEK» (NVTK) broke the streak of decline. Last week, the company’s securities were subject to sales on news of US plans to ban its allies from buying gas from the Arctic LNG 2 project. In the paper sector outsiders “Surgutneftegaz» (SNGS), which traditionally react negatively to the strengthening of the ruble. However, they were kept company in the group of outsiders by “LUKOIL» (LKOH), “Rosneft» (ROSN) And “Tatneft» (TATN). Oil stocks ignored rising oil prices, as the strong ruble offset this advantage.

Oil traders do not yet risk betting on additional OPEC+ measures

Oil fell in price at auction on Tuesday. The increase in quotes the day before did not continue. One of the ideas this week is the possible reaction of OPEC+ to the weakness in oil prices in recent weeks. A number of investment banks expect parties to the agreement to expand production restrictions. However, there is no complete certainty about this. However, demand forecasts have not yet improved. In the United States, oil consumption is expected to decrease by 300 thousand barrels per day by the end of the year, with a record production volume.

Another test for oil will be reports on reserves in the United States. Preliminary survey results Reuters they say that analysts expect an increase in oil and gasoline reserves, while a decrease in distillates is expected.

As of 8:40 Moscow time:

Brent – ​​$81.95 (-0.45%),

WTI – $77.53 (-0.04%),

Gold – $1994.70 (+0.73%).

“This information is for informational purposes only and does not constitute an individual investment recommendation.”

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