The Russian stock market completed growth for the third consecutive session. The Mosbirzhi index on Thursday added more than 2.5%, but by the end of the day it grew by 1.52% to 2489.97 points. RTS Index – up 3.6% to 1017.03%
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The ruble also strengthened. By 19.00 Moscow time, the dollar fell 1.17 rubles. up to 77.09 rubles, euro – by 15 kopecks. up to 84.95 rub.
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Growth continues in other markets. The S&P 500 index added 4.21%, the pan-European Stoxx600 – 1.3%, the London FTSE 100 – 0.53%.
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Quotes of Brent oil fell 1.18% to $ 27.07 per barrel.
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For several days now, the market has been trying to find a balance between obvious economic risks and liquidity coming from central banks, primarily the Fed, says Andrei Kochetkov, leading analyst at Otkrytie Brokers. A week ago, the Fed’s measures only frightened investors and intensified the market’s decline (as a kind of signal about the scale of the economy’s problems due to the coronavirus), but there comes a time when such an unprecedented surge of liquidity into the markets simply cannot go unnoticed, he argues: moreover, Fed Chairman Jerome Powell again made it clear that the Fed still has room for maneuver. ”
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The US Federal Reserve on Monday announced another expansion of measures to support debt markets and readiness for virtually unlimited buying up mortgage and treasury bonds. The Senate on Wednesday evening approved a $ 2 trillion package of measures to stimulate an economy affected by the coronavirus pandemic.
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Global markets began to recover, agrees Sergey Karakhanyan, the head of the Personal Broker department at Alfa Bank. He explains this by saying that the speed at which countries quarantine and the negative economic effect of measures taken have become more predictable. “Until recently, China was the only guideline, but now Italy is approaching the peak of the incidence rate. Estimates of the rates of the disease appeared, which made it possible to more effectively calculate the quarantine time for all countries, ”says Karakhanyan. In addition, the market was influenced by an impressive package of measures to fiscally stimulate the US economy, he points out.
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The panic began to decline a little and investors began to buy out the resold securities, Kochetkov continues. “Many do not wait for the market to find the bottom: the current price of securities with a rather high dividend yield (9% on the Russian market on average) is already perceived as low enough for purchases,” he said. According to the analyst, the current exchange rate values can be considered equilibrium in the context of support measures from the Central Bank of the Russian Federation and low oil prices. If suddenly a new OPEC + agreement is concluded and oil quotes exceed $ 30 / bbl., The rate may shift to the range of 70–75 rubles / $, he admits.
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Nevertheless, talking about the beginning of a large-scale correction in the markets is certainly early, Kochetkov insists. The risks of a new wave of sales remain, said Andrei Kadulin, head of the analytical department of Bank Saint Petersburg. But the CB’s support for the exchange rate will help keep the ruble from significantly weakening, and the measures of the largest regulators support financial markets around the world, which also affects the demand for Russian assets, he hopes.
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