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Alfa Morning Bulletin: 25 May 2021

  • Markets mixed due to a lack of catalysts
  • Tech leads markets higher as Fed allays inflation fears
  • Russian stocks primed for fresh growth

Markets mixed due to a lack of catalysts: While most of Europe was closed for the Whit Monday holiday, the Russian stock market drifted sideways – RTSI (+0.1% @ 1,570) and IMOEX (+0.1% @ 3,662). Russian equities closed with leaders and laggards evenly balanced. Tech stocks closed strongly as inflation anxiety eased. The ruble pared intraday losses to close with strength (+0.1% @ 73.42). Oil prices built on Friday’s gains (Brent +3.0% @ 68.49) as traders monitor the Iran nuclear deal talks which suggest that there won’t be any Iranian crude on the market anytime soon.

Russian stocks primed for fresh growth: The Russian market is set to advance further today supported by positive global sentiment after Federal Reserve officials played down the risk of persistent inflation, signaling that growth and inflation can be managed without tightening monetary policy. The dollar is trading at a three-month low against a basket of major peers and gold prices remain strong. Supporting the Russian investment case Brent remains back above $68/bbl and the ruble continues to strengthen. Overnight, President Putin and Biden both confirmed they would meet in Switzerland next month with an agenda to improve relations between the two countries. We anticipate a broad advance across all sectors, with a slight skew in favor of growth stock in the tech and telco sectors. Oil & gas names and banks are also well positioned. Metals producers may face some headwinds.

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The contents of this document have been prepared by Joint Stock Company “Alfa-Bank” ("Alfa Bank") as Investment Research within the meaning of Article 36 of Commission Delegated Regulation (EU) 2017/5...

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