The stock market rose in anticipation of fed decision on rate

The stock market rose in anticipation of fed decision on rate


The MICEX index to closing has grown on 2,5% – to 1747,57 points, RTS index – on 3,19% to 704,87 item. The dollar calculations “tomorrow” to 19.00 Moscow time has decreased by 4 kopecks to 78,26 of the ruble, the Euro grew by 11 cents – up to 85,16 ruble.

MOSCOW, 27 Jan. Elena Likova. The share market of the Russian Federation on Wednesday has grown on the major indexes in anticipation of the fed’s decision on rate that will be disclosed Wednesday after the close of the stock market.

The MICEX index to closing has grown on 2,5% — to 1747,57 points, RTS index – on 3,19% to 704,87 points, follows from the data of the Moscow exchange.

The dollar calculations “tomorrow” to 19.00 Moscow time has decreased by 4 kopecks to 78,26 of the ruble, the Euro grew by 11 cents — up to 85,16 ruble.

“The Russian stock market grew on Wednesday because of improved expectations of investors before the US Federal reserve’s decision on interest rates”, — says Mikhail Krylov from “Golden Hills — Kapital AM”.

Leaders

Among leaders of growth – actions “Pharmacy chain 36 and 6” (8,61%), MMK (5,44%), MegaFon (5,26%), ordinary shares of Sberbank (4,65%), Moscow exchange (4,06%), as well as shares of NOVATEK (3,99%), NLMK (3,95%), Yandex (3,75%) and stocks of LUKOIL (3,47%).

Ordinary shares of Sberbank rises to its short term descending trend originating from the highs of December last year, says analyst investholding “Finam” Bogdan Zvarich.

“In case of breaking of this trend we can talk about changing trends in the paper, and the first upside target in this case could be the level of 110 rubles”, — he said.

Outsiders

The gap between the shares of “Aeroflot” (-0,57%) from the market, apparently, is connected with the message of the company about lowering tariffs for travel abroad, tickets for which are denominated in euros, said Vitaly Manzhos from the Bank “Education”.

“Recall that by the end of 2015, Aeroflot group significantly reduced the volume of international passenger and cargo flights. A logical consequence would be a reduction of foreign exchange earnings in the current circumstances could not be considered a positive factor,” he said.

Also among leaders of falling – ordinary shares of “RUSAL” (-0,44%), prefs of Transneft (-0,3%), Raspadskaya (-0,27%).

Forecasts and recommendations

The highlight of the day and week will be the end of the fed meeting, which the Russian market will already win back on Thursday, analyst GK “InstaForex” Igor Kovalev.

“It is widely expected that the fed will take a more pessimistic mindset regarding the state of the economy, which will support financial assets around the world, because it would mean a very gradual pace of policy normalization,” he commented.

A hint of policy easing in the U.S. may cause an increase in fuel futures 4%, and together with them will grow the domestic securities market, said Mikhail Krylov from “Golden Hills — Kapital AM”.

During the day, the MICEX index may reach 1792 points, with the rouble strengthening by 2% will cause a 5% growth of the RTS index up to 736 points, he said.

Now with a certain degree of caution we can say that a cycle of raising interest rates in the US will be gradual, and the fed will lift this year’s rate is not four times and not more than three times (up to 1,00-1,25%), which will allow the oil price to bounce up, said Sergei Kochergin from Exness group.

The renewal cycle to reduce the key interest rate in Russia is likely to be delayed until March, but this process seems inevitable and will support business activity in the Russian Federation, also, he notes.

“In the medium term we expect a significant revaluation upwards in the price of Russian shares. In the short term, the MICEX index may reach the range of 1750-1800 points,” he says.