Equities Friday will be focused on the Central Bank of Russia’s decision on the refinancing rate, which will stay put at 8.25 percent according to most analysts, as officials wait for inflation to drop below 6 percent before decreasing the benchmark.
If left unchanged, stocks will likely continue their five-day
losing streak.
“Bank shares are sensitive to the stimulus speculation; the
market would receive a boost if the central bank cut its main
rates,” Stanislav Kopylov, an asset manager at UralSib Asset
Management, told Bloomberg.
Traders will watch Russia’s two largest banks, Sberbank and VTB,
respectively, after the decision is reached. Both banks’ shares
dropped ahead of the meeting.
Russia’s MICEX index continues its losing streak, and after poor
performance on Russian floors, closed at 1362.38. The RTS gained
.015 percent to 1303.28.
Asian optimism could help counterbalance losses in Friday
trading.
The Nikkei 225 rose 0.45 percent after the Bank of Japan
announced it decreased its money supply in June from 3.8 percent
to 3.7 percent. The Hong Kong Seng Index is also trading high, up
0.39 percent at 21,740.81.
Oil, Russia’s main export, is slightly on the rise, which boosted
shares in oil giants like Rosneft (+0.36 percent) and Gazprom
(+0.30 percent) on Thursday’s floors.
Oil prices are on the rise following the US report in lower
inventory. WTI rose 0.72 percent at $104.14 per barrel and Brent
jumped 0.31 percent to $107.01.
The top concern among American investors will be speculation on
the US Federal Reserve and when it may begin tapering its
stimulus plan.
At market close, the Dow Jones rose 0.18 percent, the S&P
gained 0.39 percent, and the NASDAQ Composite jumped 0.41
percent, ending a three-day losing streak.
European stocks will look to official French data on industrial
production and the UK’s release of their trade balance on trading
floors.
"On Friday, August 9, in the western markets will experience
weak performance in low activity of investors," according to
Andrew Shenk, an analyst at Investcafe.
European markets finished strong on Thursday on steady Chinese
inflation data. Germany’s DAX is up 0.70 percent, France's CAC 40
gained 0.64 percent and London's FTSE 100 increased 0.28 percent.
Australia’s S&P slipped 0.6 percent after the Reserve Bank of
Australia cut its 2013 GDP growth outlook down to 2.25 percent
from 2.5 percent. Static unemployment data from Thursday is
another factor for low-trading.