Morning Note /
Russia

Alfa Morning Bulletin: 7 September 2021

  • Stock sentiment remains bullish

  • Metals & miners and utilities in demand

  • Russian equities remain buoyant

Alfa
7 September 2021
Published byAlfa

Stock sentiment remains bullish: Stock markets climbed toward new highs on Monday as investors bet that weak macro data should delay tapering. There is also hope that Japan’s new prime minister may bring added fiscal stimulus to kick start the economy there, while there is speculation that China would also inject stimulus through fiscal and monetary policy to head off a slowdown in economic growth. Aluminum prices hit a 10-year high due to political unrest in Guinea. Russian equities ticked higher with global peers – RTSI (+0.2% @ 1,737) and IMOEX (+0.7% @ 4,028) – with metals & miners and utilities among those most in demand. The ruble was under pressure but managed to close flat (unch. @ 72.98) versus a stronger US dollar and a weakening oil price (Brent -0.5% @ 72.22).

Russian equities remain buoyant: Russian equities can be expected to maintain upward momentum today with support coming from better-thanexpected Chinese export data for August and the prospects of tapering being delayed and largesse from global central banks being prolonged against uncertainty surrounding the spread of the Delta variant of Covid. Crude prices are rebounding this morning and currency markets are stable. Wall Street reopens today and US stock futures are currently trading flat. Russian equities can be expected to advance further this week driven by the reflation trade and cyclical stocks, with ample value remaining in value shares such as banks. Metals & miners should continue to attract buyers. Quality growth stocks, particularly mega-caps, are expected to remain in demand and that should provide a tailwind to Russian tech names.

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