It will be difficult for Russian stocks to continue a confident rebound today

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Алексей Антонов, АЛОР БРОКЕР 22 July 2021 11:11

Domestic investors yesterday continued to buy back the shares that sank on Monday. But they did it very sluggishly. Not only did the Moscow Stock Exchange Index grow by only 0.5% yesterday against the US indices that added 0.8% and far more than a percent of the European indices, but the trading turnover also decreased. Yesterday, a little more than 50 billion rubles were traded in the securities of the Moscow Stock Exchange Index – this is a third less than the average level.

The oil market looked weak, despite the fact that yesterday oil soared by more than 5%, and again went above $70 per barrel. There were no special reasons for the growth of oil prices, just as there were no reasons for its collapse by more than 6% on Monday. Moreover, the US Department of Energy, for the first time in 8 weeks, reported an increase in oil reserves by 2.1 million barrels, while the market expects a decrease of 4.5 million barrels.

Even more frightening is the decline in the shares of Sberbank and Norilsk Nickel, in which non-residents invest the largest share of their assets, against a good background. It seems that foreign investors are slowly leaving ruble-denominated shares, selling them on rebounds.

One more negative was the increase in OFZ prices. The yields of state securities are now very chocolate in the conditions of the vague prospects of the stock market, and the flow of funds to the debt market is quite justified. If tomorrow the head of the Central Bank Elvira Nabiullina gives a hint that the rate will not grow aggressively in the future, then the withdrawal of money into bonds may increase.

Among the positive aspects, it is worth noting the final clarification of the issue with the "Nord Stream 2": Germany and the United States have agreed! This pulled up Gazprom's quotes by 2%. We believe that Gazprom will not stop, and it may well conquer the 300 RUB mark even in the conditions of a sideways movement according to the Mosbirzhi Index.

MMK and NLMK will publish their reports for the second quarter today. It is possible that after the event, someone will start fixing profits, but the securities should not sink much, with their quarterly dividend yield of more than 4%, medium-term investors will not get rid of the shares.

In general, today the external background can be described as neutral. US futures are adding a symbolic 0.1%, metals are trading in different directions, oil is losing a third of a percent, going down to $72 per barrel. If the situation on the Western markets does not improve dramatically, it will be difficult for the Russian stock market to continue the rebound, given the lack of a pronounced desire to buy.

The ruble rose yesterday in a pair with the dollar, which is a consequence of the tax period and an increase in demand for OFZ. The pair ended the day at 74, which is not a very strong support. This morning, the ruble is trying to develop success, and it is possible that it will succeed. However, it is dangerous to buy the ruble against the dollar, even speculatively. It is better to wait until Friday, when the Central Bank will announce its plans for its monetary policy, wait for the pair to turn up and join the devaluation movement of the ruble.

Alexey Antonov, Chief Analyst at ALOR BROKER 

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