Market Buzz: No Christmas surprises expected from Russian market

With little sign of a Christmas rally, trading volumes are beginning to drop towards the end of the year. And the coming week is unlikely to deliver an early Yuletide gift both in Russia and globally.

After closing in the red on Friday, Russian markets aren’t expected to bring any surprises this week. RTS finished trading at 1373.73, which is 1.54% down, with the MICEX also being 0.73% down, to 1 383.42.

Global markets also remained pretty calm last week, despite positive October statistics from the EU indicating a trade balance surplus. It was a hundred million euro above general expectations, at 1.1 billion euro. This helped European markets finish trading on Friday with a downward slide. The French CAC 40 went down 0.88 % and German DAX lost 0.5%.

Igor Prokhaev from Troika Dialog doesn’t expect much activity during the coming week, but says overall global investment sentiment is going to be positive.

That’s “if we don’t see any serious bad news from Europe, and I think that the credit that’s going to be released for Greece will be taken very positively by European and global investors. And I don’t think the US will give us any negative surprises.” Prokhaev explained.

However, “Russia remains very cheap”, with the changing global sentiment possible to make a turnaround for Russian market, adds Prokhaev.

The news about the European fiscal union, expected to come on Monday, may add significant optimism to the markets by the end of the day, should any agreements be reached, underlines Anton Safonov from Investcafe.

And as political uncertainty remains one of the key drivers in the Russian market, firm and confident steps of Russian authorities to improve political environment in the country could trigger growth longer term, says another Investcafe expert – Kirill Markin.

3Q 2011 GDP statistics from the USA, that come on Thursday, as well as the data about personal income and expenses, expected to be released on Friday, will be among the most important drivers this week, Safonov concludes.