Market Buzz: US labor figures cast a long shadow

US labour figures rule
In the first half of Friday, Russian markets are expected to continue reacting to yesterday’s events. And the long- awaited US labor statistics will start driving the markets once they are released on Friday afternoon, Moscow time.

Market players expect the US to say its economy managed to create about 150,000 new jobs in January, with the unemployment rate remaining relatively stable, at 8.5%.

Prime Minister Putin’s Wednesday speech at the Russia Forum 2012 might be influencing investor sentiment in the Friday session, Kirill Markin of Investcafe said. "We have to move 100 steps ahead from 120th to 20th place in terms of conditions for doing business,” the Prime Minister told the Forum. “Today it’ll become clear to what extent that intention inspired investors,” Markin concludes.

A decision from the Russian Central Bank on its base rates, as well as the expected release of Rosneft IFRS results for 4Q 2011, will be among other major domestic market drivers on Friday.

Both RTS and MICEX grew marginally in Wednesday’s session. The RTS was up 0.19% to reach 1, 602.67 points, with the MICEX going up 0.20% to the level of 1,542.39.

News from Russian financial authorities released at the Russia Forum 2012 were also among key domestic drivers on Wednesday.

VTB shares added 1.06% on the back of the Prime Minister’s recommendation that the bank buy back shares from its minority shareholders. The IFRS net profit of Sberbank in 2011 was above $10.5 billion, German Gref, the bank’s chief, told the Forum. The forecast is more than 50% up on 2010, but the news didn’t have an immediate effect on its shares, which lost 0.14%.

Looking beyond Russia’s borders, one of Wednesday’s key events was the drop in the number of Americans making a fresh claim for unemployment benefit, Markin says. The figure went down by 12,000 last week, giving a total of 367,000. This, however, was not reflected in Wednesday session on the Russian markets, as the news was only released at 17.30, Moscow time – just before the end of trading, explains Markin.

The so called “Greek factor” continued to constrain growth in the region.Stocks there grew an average of 0.25% on Wednesday. So far, Greece has not reached any agreement with its private creditors. It was earlier expected that investors would write off about a half of the Greek debt, which would provide for a further package from the US and the IMF of €130 bln. On Wednesday, China’s refusal to contribute to the European Financial Stability Fund probably also added frustration to the markets.