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Russia stock market slumps on lower world oil prices

The Russian stock market suffered a new setback Monday after world oil prices fell.
MOSCOW, September 11 (RIA Novosti) - The Russian stock market suffered a new setback Monday after world oil prices fell.

At 16:30 p.m. Moscow time (12:30 p.m. GMT), the index of the Moscow Inter-Bank Currency Exchange (MICEX) slipped 3.5% on Friday's close, to 1,356.67 points.

The biggest fall was registered in the stocks of the crude producer Tatneft (4.77%), the metals giant Norilsk Nickel (4.65%), the oil firm Surgutneftegaz (4.38%), the energy giant Gazprom (3.98%) and the independent crude producer LUKoil (3.94%).

"The continued fall in oil prices has dealt a new blow to the Russian stock market," said Denis Barabanov, an analyst with Bitza-Invest investment firm.

The index of the Russian Trading System (RTS) declined 2.65%, to 1,549.03 points. The biggest decline among blue chips on the RTS stock market involved shares of the state-run retail savings bank Sberbank (6.8%), the gold mining company Polyus Zoloto (4.7%) and Gazprom (4%).

"Oil prices fell to a five-month low, and are now close to $65 per barrel," Barabanov said. At the same time, he said, price fluctuations on international oil markets were not related to fundamental changes in supply and demand.

"Any hint of a worsening situation in the Middle East may reverse the prevailing trend," he said.

In addition to oil price dynamics, experts also said Russian stocks do not enjoy foreign investors' support. There was no large inflow of nonresidents into the domestic stock market in the fall, and Russian traders started to close long positions opened during the summer.

Some experts said global investors have not lost interest in the Russian market. But growth in stock markets will begin only after the U.S. Federal Reserve clarifies its interest rate position at its regular meeting September 20, said Vladimir Detinich, the head of the analysis department at Olma investment fund.

Experts said stock prices could register some upward correction, unless oil prices renew their record lows Tuesday. Moreover, many stocks will be attractive to buyers following their price slump Monday.

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