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Russian investors prefer to act cautiously

On Monday, the Russian stock market ended trading with a moderate increase, feeling the impact of corporate stories and the sanctions background. By 18.30 Moscow time, the Moscow Exchange Index rose by 0.76%, to 2409.64 points, and the index increased by 0.84%, to 1426.8 points, updating another peak since February 18.

The ruble on the Mosbirzhe by the evening strengthened within 0.5% against the dollar and, located at 53.20 rubles and 56 rubles, respectively. In Forex, the dollar and the euro fell by less than 2%. The US currency retreated from another intraday low since 2015 at the level of 51.75 rubles, while the euro remained slightly above the low of 55.50 rubles reached last week.

Issuers

By the end of the session, Sovcomflot (MCX:) (+10.29%), Petropavlovsk (+8.97%), PIK (MCX:) (+8.86%), RusAgro (+7 .56%), Yandex quotes (MCX:) (+6.92%), X5 Retail Group (MCX:) shares (+6.74%).

The sharp rise in Sovcomflot shares on Monday may be related to last week’s news about the issuance by India of certificates for compliance with technical safety requirements for dozens of ships owned by the company. As a result, Sovcomflot courts will be able to supply oil to India and other countries even after Western companies refuse to provide such services to Russia due to sanctions. There have already been reports in the media about the entry of Sovcomflot oil tankers into European ports, despite the sanctions, as the company has placed its “daughters” in Cyprus and the UAE, and also uses the flags of Liberia on tankers. The news is favorable for Sovcomflot, as it indicates the continuation of its activities despite the restrictions being introduced.

Petropavlovsk jumped for no apparent fundamental reasons, going against the dynamics of other gold miners. The debt-troubled Petropavlovsk has a different corporate history than its main competitors, and the company’s shares are more volatile.

The decline leaders were Polymetal (MCX:) (-3.86%), Polyus (MCX:) (-3.52%), Seligdar (-2.97%), MMC Norilsk Nickel (- 2.29%), shares of TMK (MCX:) (-1.11%).

Gold miners declined on Monday due to the prospect of the G7 countries introducing a ban on the import of Russian gold. According to the Federal Customs Service, in 2021, 88% of Russian gold exports went to the UK, with companies selling their products to banks, which then sent the metal abroad. New sanctions may lead to lower purchase prices within the Russian Federation, as well as the formation of a discount for Asian buyers due to the threat of secondary sanctions. At the same time, the structure of global demand for , most of which falls on the jewelry and investment sectors, as well as the relatively small share of Russia in world production (about 9.2% according to the World Gold Council for 2021) do not allow us to expect a sharp jump in world precious metal prices in the event of restrictions.

External background: moderately positive

US stock exchanges: mixed mood. Trading on the US stock exchanges by the end of the session in the Russian Federation took place without a single dynamics of the three major indices, which changed within 0.2%, consolidating in the area of ​​the first short-term correction targets after the increase at the end of last week. Thus, the indicator cannot yet overcome the resistance of 3940 points (the middle Bollinger band of the daily chart), which would allow it to accelerate the pace of the upward movement. Macroeconomic data on Monday, meanwhile, turned out to be better than expected. Thus, orders for durable goods in May rose by 0.7% m / m (+0.1% was expected), following an increase of 0.4% a month earlier. At the same time, the index of pending transactions for the sale of houses in May increased by 0.7% m/m against expectations of a decline of 3.7%. Strong statistics give a “green signal” in favor of further tightening of the Fed’s monetary policy.

European stock exchanges: neutral mood. By the end of the main trades, the index retreated from the highs of the day and added about 0.2%. The market was waiting for the emergence of new significant signals. At the same time, this week the ECB is likely to continue discussing a mechanism to protect against fragmentation of government bond yields as part of a three-day forum starting today, at which the heads of the ECB, the Fed and the Bank of England will speak on Wednesday.

Oil market: positive mood. The nearest futures for and in the evening, after fluctuating during the day, accelerated the increase and added about 1.5%, trying to return to the resistances of $114.50 and $110, respectively, amid expectations of limited global supply. At the G7 summit these days, new energy sanctions against the Russian Federation are likely to be announced, and the prospect of lifting restrictions on oil exports from Iran and Venezuela in the near future does not look very real. OPEC+ at the same time lowered its forecast for an oil surplus in the world market this year from 1.4 million to 1 million barrels per day.

Market Tomorrow

General mood: On Monday, foreign stock exchanges generally maintained a restrained appetite for risk, which, in case of overcoming short-term resistance, may develop into larger-scale purchases. At the same time, oil prices also tried to return to growth, and gold remained almost unchanged before the likely introduction of a ban on its imports from Russia. The Russian market rose moderately, also not particularly reacting to the prospect of new restrictions in the metallurgical and energy sectors. In the short term, the RTS also retains further upside potential, but investors prefer to proceed cautiously. Securities of developers are in high demand in recent sessions.

About author

Oxford graduate with honors. He worked in large financial projects for well-known Wall Street corporations. After he earned his first capital and a reputation as a successful trader, he opened his own company. At the moment, the growth of the company's capital is 20% per year.
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