Russian stocks continued to fall last week against a backdrop of the risk of additional sanctions on Russia and ruble depreciation. This week, oil prices, geopolitical risks and dividend policies are expected to be the focus.
Russian stocks fell last week (21st-25th), with the dollar-denominated RTS Index extending its decline to 849.31, down 1.01% from the previous day, and falling 0.40% on a weekly basis. The market opened lower, rebounded on the 22nd and rose again on the 23rd, before falling again on the 24th and 25th.
Factors cited included Brent crude's temporary retreat to around $100, concerns over the risk of additional US and European sanctions on Russia, and remarks that no progress had been made in Ukraine peace talks. Oil prices subsequently returned above $100, providing a buying catalyst, while a surge in state-owned Gazprom shares supported oil- and gas-related stocks.
In the second half of the week, rising tensions in the Middle East lifted oil prices into the $103 range and strengthened buying at times. However, the introduction of an excess-profits tax on mining stocks and continued ruble depreciation weighed on the market, strengthening consolidation. On Friday the 25th, the market fell again, with profit-taking prevailing.
This week, talks aimed at ending the Russia-Ukraine war, Western sanctions on Russia, oil and gas prices, the ruble and inflation trends will remain in focus. Inventory statistics on the 29th and 30th are also expected to affect market movements. Scheduled economic indicators include August unemployment, retail sales, GDP growth and manufacturing PMI data.