29 April 2004 01:56
Stock slump eases
As of 2:00 p.m., Moscow time, on the RTS, blue chips were down 2.6%
to 5%. Norilsk Nickel led the market down a second day with shares
MOSCOW. April 29 (Interfax) - Russian stocks followed international markets and oil prices down on Thursday morning,
but by midday the slump had eased and there was cautious demand.
plummeting 6% to $60.2.
The morning's drop was triggered by decline on Wall Street (the Dow Jones and Nasdaq saw their hardest fall for
6 weeks on Wednesday) and lower oil prices and China' decision to restrict financing, which had a considerable
impact on raw material markets, especially pushing metal prices down, traders said.
Limited month-end ruble supply does not encourage steady demand.
Together with the negative reaction to outside news, some investors preferred to close long positions on shares -
something that began on Wednesday evening, said Sergei Zagoruiko of MDM Bank. "Quotes went down across the board.
It seems, speculators do not want to hold on to long positions over the [upcoming] long holiday," he said.
"There is no particular panic on the market, instead the decline was a good excuse for speculative buying in the
afternoon, for example, there is demand for Lukoil and Surgutneftegas. I think that on Friday, speculators will close
short positions, which will lead to a slight upward correction. Funds are insufficient for a serious climb," he
said.
Among the news at home, a ruling from the East-Siberian district arbitration court, transferring the
Sayano-Shushenskaya hydropower station into federal hands, came into force.
Transferring Russia's biggest hydropower station, within Unified Energy System, to federal hands is a dangerous
precedent and might be seen by some foreign investors as the beginning of renationalization, Sergei Suverov of Zenit
bank said. "The Cabinet has not said anything about compensation for the possible loss of the station to UES or
about the mechanism for implementing its instruction. The news is unprecedented and gives speculators the chance to
seriously push UES shares down, especially with the market quite nervous in light of the Yukos bankruptcy threat and
worsening problems with ruble liquidity," he said.
UES fell together with the rest of the market on Thursday and did not stand out particularly.
On the RTS, prices were up 4.7% for Unified Energy System, 3.5% for Lukoil, 3.6% for Mosenergo, 4.8% for Rostelecom,
2.6% for Sberbank, 5% for Sibneft, 3.2% for Surgutneftegaz, 4.4% for Tatneft, and 3.4% for Yukos (to $11.35).
Second-tier shares also tumbled, with quotes down 5% to 10% on average.
The market is waiting to hear U.S. GDP figures for the first quarter at around 4:30 p.m., Moscow time, and this may
have some impact.
"New GDP statistics are very important for the market because they will provide a guideline to the Federal
Reserve's decision on interest rates (the Fed is to meet on May 4). The market is, in principle, ready for the Fed
to raise interest rates, but the amount and timing of the hike remains an intrigue," Zagoruiko said.
The RTS index tumbled 3.2% to 649.05 points.
The MICEX composite was down 3.9% to 575.81.
Trading volume was at $27.326 million on the RTS (including $12.62 million in direct deals), and was 11.2 billion
rubles on the MICEX.
Gazprom shares on the St. Petersburg exchange plunged 3.3% to 58.3 rubles in volume of over 20.614 million
shares.
The S&P/RUX composite ruble index fell 2.89% to 788.07, and the index in dollars lost 2.87% to 162.73.
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