Daily Review. 9th November, 2009

Russian benchmarks closed in negative territory Friday. Bearish trends seen throughout the session gained momentum near the closing bell after the US Labor Department released worse-than-expected unemployment numbers, with the RTS Index inching down 0.05% and the MICEX Index easing 1.32%.

O&G names moved lower on falling crude futures, as Gazprom gave up 2.8%, Rosneft shed 0.6% and Lukoil sank 2.8%. Domestic banking names emerged among the outperformers, with Sberbank edging up 0.2% and Bank VTB adding 0.5%. Steels moved lower along with the market, as MMK declined 2.3%, NLMK dropped 0.5% and Severstal skidded 0.9%.

Despite disappointing unemployment numbers, US equity benchmarks managed to Friday’s session in positive territory, as commodities led the market higher. Asian exchanges also look bullish this morning on reports G20 nations are not going to scale down anti-crisis measures. Crude prices took a sharp leap on fears oil supplies from Mexico could be cut as a powerful hurricane is drawing near. Brent contracts are currently trading around USD 76.80 per barrel.
We think Monday morning’s news flow is favorable for the Russian equity market. Specifically, O&G plays could outperform today taking into account an uptick in crude oil prices. Metals could also see gains on the heels of rising commodity markets, as positive developments in precious metal prices could shore up Polyus Gold and Polymetal.