Market watch November 14: Mild relief before global clouds move in once again
Having headed home from a sepulchral days trade on Thursday, a brief ray of light would have entered the lives of those Russian investors had they been tuned into global developments while their families were watching the evening movie. For not only had OPEC added a late November, instead of late December, meeting to their agenda with which to trim oil production, but U.S. inventory figures had shown a smaller than expected increase. The net result was something of turnaround in crude prices, which had been wallowing at 21 month lows. To add to the positive vibe, this had led in turn to a jump in share prices of energy producers. Late in the day this combined with the sudden thought, that maybe some of the recent sell offs had gone a little far, and led to a late afternoon rally which added 600 point to the Dow, and gave it a 6% gain for the day.
Some of this flowed through to Friday trade in Asia where the Nikkei and Hang Seng both added more than 2%. More importantly for Russian investors, crude prices continued to firm with Nymex futures and WTI spot prices moving back into the upper $50's BBL range, and Brent getting up of its near $50 BBL floor. As a result the RTS and Micex both surged from the starting blocks to add more than 5% within 30 minutes, but alas from there it was all downhill. At the Moscow close the RTS had added 3.89% at 644.02 and the Ruble denominated Micex, more directly subject to negative sentiment about the Russian currency, had fallen 1.06% to 592.07 – with the additional 45 minutes of trade on the Micex allowing it to absorb more negative data coming out of the U.S.
The firming crude price in the Moscow morning fed through to some sizeable early gains for the Russian energy majors, but as the black stuff surrendered the gains during the course of the European trading day, they came back to near where they started. That left Rosneft (down 2.3% on the Micex at close), Lukoil (down 2.4%) and GazpromNeft (down 0.38%) under the card for the day, with Surgutneftegaz (up 4.77%) somehow managing to cling to a gain. Gazprom (up 0.34%) managed to hold on to something of a gain, and Novatek (down 1.06%) eased.
Metals prices also lifted overnight and managed to hold on more strongly to the gain throughout the day, with gold and silver also gaining on the day. This translated to small gains for Polyus Gold (up 0.84%) and Polymetal ( up 1.32%) but Norilsk Nickel didn’t gain traction and shed 7.89%, and coalminer Raspadskaya was also down 2.67%. Amongst the steelmakers, Severstal (up 0.13%) ended up pretty much right back where it started, with MMK down 6.07%, and NLMK getting a 16.4% rise out of the day.
Amongst the banks Rosbank (up 6.42%) and Bank Vozrozhdenie (up 4.68%) led the way, with Sberbank (up 1.56%) and Bank Moskvy (up 1.43%) also taking the chance to rise before the next wave of selling hits, leaving VTB (down 2.42%) to stick with reality.
In the retail and consumer goods world, Sedmoi Kontinent (up 0.7%) managed a meager gain to match Magnit’s (down 0.7%) meager fall, while dairy and juices producer Wimm Bill Dann worked its way to a 4.91% gain for the day, and agricultural producer Razgulay closed marginally lower despite reporting a more than 90% increase in 1H 2008 Net Profit. Elsewhere Veropharm (up 0.65%) closed ever so slightly higher while Kalina (down 6.73%) had no such luck.
IT services play, Armada closed 3.5% lower, while telecoms Rostelecom (up 11.91%) and Centre Telecom (up 4.17%) had good days. Truckmaker Kamaz (up 2.64%) gained while carmakers Avtovaz (down 1.39%) and Sollers (down 7.1%) closed lower.
Europe followed a similar pattern with early day gains tapering off on the release of data showing the Eurozone had entered a recession towards the close, particularly after the opening of the U.S. Markets. In London the FTSE 100 closed 1.5% higher with insurers gaining. The Dax added 1.3% and the Cac 0.6%.
In New York stocks opened lower after the release of worse than expected retail data for October showing not just the 4th consecutive fall but a 2.8% fall – the worst since 1992. A late afternoon sell off saw the Dow close 3.82% lower with the Nasdaq down 5%.