Market Buzz: Flat Friday, but for oil

Russian markets are expected to be mostly reflecting international news on Friday, as on February 23 they were closed for a public holiday. Overall investor sentiment will be neutral, experts agree.

“I think, we’ll se a mild opening. I think, we’ll see relatively illiquid trading, with investors looking for interesting ideas,” Dmitry Kryukov, a head of Russian office of Verno Investment Research, tells Business RT.

Also, with the presidential elections coming closer, there will be some preposition among investors, which, however, is not expected to be aggressive, Kryukov adds.

“People will be looking for some hedge, people will be looking for turning [the] exposure in the less liquid [company] names,” the Verno expert says.

Rising oil prices will be one of key factors underpinning growth in Russian markets, experts agree.

US data showed that inventories stood at a comfortable level last week, exceeding forecasts by almost triple. But the number for jobless claims in the country stood at its two-year low last week, at 351,000 against the expected 354,000. And high potential demand for oil from developing economies, coupled with tensions in terms of oil supplies from Iran all trigger further growth of the black gold.

Indeed, commodity markets demonstrate record growth of so called “hedge assets”, where Brent goes beyond $124/bbl and Light Sweet being traded above $108/bbl, adds Kirill Markin of Investcafe.

Eurozone statistics, corporate news, as well as a so-called “Friday factor” will also have its say in moving the markets, Markin says. Germany is to release its GDP figures for 4Q 2011, with Great Britain also to publish its revised figure for the same period. Both are expected to show a decline of around 0.2% quarter-on-quarter, Markin expects.

Domestically, Nordgold, which has recently separated from its former parent company Severstal, will release its first independent IFRS report for 2011.

Both RTS and MICEX closed a previous session in the red, losing 0.07% and 1.33% respectively. RTS stood at 1, 640.89 points, while MICEX was at 1, 538.17 points.