Stock market review for November 3, 2020: what changed the ruble's decline
The market on the eve of
The trading session was quite volatile. The day began with a noticeable drop, but by the end of the day quotes entered the green zone amid the growth in world markets after the publication of macrostatistics in the U.S. The leaders of the growth were NOVATEK shares (NVTK 1016.8, +6.2%) and TGK-1 (TGKA 0.011322, +7.03%). Shares of LSR (LSRG 891.2, -1.46%) closed on negative territory. USD/RUB jumped above 80.
Market and company news
Ruble The currency has been trading at its lowest level against the dollar since March 30. The main reason for its weakening was that oil has been at its lowest since late May. In our opinion, the dynamics does not go beyond expectations. There is no panic buying of currency on the market, the trade turnover grew moderately. Ruble quotations are determined by two components - macroeconomic and speculative, or connected with uncertainty of results of elections in USA.
In terms of macroeconomics, the exchange rate is in line with expectations at the current oil price, which stays close to 3,000 rubles per barrel. Thus, the economy remains resilient. The drop in the trade balance in November may amount to $90-140 mln, which is negative, but will not lead to a shock on the foreign exchange market.
The U.S. election results will play out rather roughly, but probably not for much longer than the rest of the week. We expect the pair to remain in the 78-82 range on Friday. At the same time, short-term exits are not ruled out on Wednesday (at FOREX market) and on Thursday, when the currency section at the stock exchange opens.
Trade ideas
Moscow Exchange (MOEX 134.00, -4.49%), spec. buy, target -145 rubles. Increased volatility in the markets will lead to a significant increase in trading turnover. Besides, the exchange expands the list of traded securities.
Expectations
We expect increased volatility. The market dynamics will be determined not by local events, but by the external background. The focus is on the coronavirus attack and the final elections in the USA. It's possible that many players will hurry to close long positions before the weekend on Wednesday. The benchmark for the Mosbij Index is in the range of 2650-2750 points. Forecast for the USD/RUB pair: 79.50-80.50 points.
- More forecasts and news on the Fortrader channel at Telegram