Market Buzz: Riding the wave of US and EU news

Many factors are to impact Russian markets over the week – from decisions on the Greek crisis to reports on the US economy and active political scene inside the country. Analysts expect the energy sector to perform better.

European news, the US report on personal income and spending, as well as manufacturing reports for all major economies will be the key international drivers this week.

“The first EU leaders’ summit of 2012 will dominate the headlines today with the threat of a Greek default still hanging over the region like a sword of Damocles,” explains Chris Weafer, chief strategist at Troika Dialog.

The expected start of marketing of Facebook IPO this week will “also have an influence on global investor confidence in February,” Weafer adds.

Domestically, another protest scheduled to take place in Moscow on February 4, as well as the election in March will start having its say in market dynamics, analysts agree. Historically, in such pre–election periods, the shares of oil giants Rosneft and Lukoil were the best performers, says Alexandra Lozovaya, Investcafe analyst.

“I assume this year won’t become an exception, with the expectations of higher oil prices supporting further the oil and gas sector,” Lozovaya adds.

Douglas Rohlfs, Vice President, International Sales & Trading at Uralsib, remains optimistic about Russian markets this week, saying that some change in the leading sectors might take place.

“Even though with some correction the market will see some sector shifts, from oil and gas to banking stocks,” he concludes.

Both the RTS and the MICEX finished Friday trading in the red, going down 0.41% and 0.44% respectively. This came on the back of worse than expected data from the US, as well as difficulty in reaching a solution to Greek debt restructuring. The RTS was at 1, 566.62 points, with the 3.2% gain for the rouble against the dollar keeping it above the MICEX figure of 1, 508.04.