MOSCOW, November 6. /TASS/: The prospects for the onset of political certainty in the United States, including the victory of Joe Biden, as well as the monetary stimuli of world central banks push up the assets of new markets, and after that - the securities and currency of the Russian Federation. According to experts interviewed by TASS, the recovery of the domestic market should continue next week - the MOEX index may reach 3,000 points, and the ruble will strengthen to 76 rubles per dollar.
The growing appetite for risk buying on global markets and the recovery of oil prices above $40 are now the most significant factors in the movement for ruble assets. Thus, by Thursday evening, the MOEX index added 2.69%, the dollar rate against the Russian ruble decreased by 2.33% to 77 rubles.
The reason for expanding purchases of risky assets was the approaching political certainty in the United States. The preliminary election results also bring positive, which indicate the impending victory of Biden together with the preservation of the Republican leadership in the Senate.
"If the current scenario does not change until the end of the vote count, then it can be considered one of the most positive among the possible. At least for the stock markets of Europe, the United States, and China. Since Biden will conduct a less aggressive foreign policy compared to Trump, and the domination of the Republicans in the Senate will not allow the Democrats to drastically change the economic course of the government," Head of investment consulting at Tinkoff Investments Premium Kirill Komarov said.
At the same time, an increase in the chances of Biden's victory contributes to the growth rate of securities of the companies in the Nasdaq index on the American markets, Freedom Finance analyst Alexander Osin added. "In the Russian market, this trend may have manifested itself in the relatively active growth of shares of Yandex, HSCI, Sistema, Qiwi," he said.
In addition to the completion of the US elections, investors are also waiting for the adoption of new stimulating measures for the US economy, investment strategist at BCS World of Investments Alexander Bakhtin said. "These expectations reinforce the dollar's decline in the foreign exchange market, which provides support for the currencies of developing countries and the cost of commodities," the expert said, adding that the growth in demand for risk assets is also associated with monetary signals from other major central banks. Thus, the Bank of Japan is expanding the QE program (quantitative easing), which may be followed by regulators in the UK and Australia.
According to experts, the growth momentum in the markets will continue in the coming days, but with less pronounced dynamics. In the future, demand for Russian assets may be limited if the sanctions rhetoric intensifies, they added.
"Russian assets may continue to grow following world markets, at least until a fundamental indication of a new direction in relations between the Russian Federation and the United States appears," Kirill Komarov believes. "However, given that the Trump administration has already demanded a recount in some states, the election results may remain the main topic for several weeks," the expert added.
On the other hand, the lingering uncertainty about the election results may contribute to fixing profits on the stock markets, Veles Capital analyst Elena Kozhukhova noted. One continuing key problem should not be forgotten - the situation with the incidence of COVID-19 in the world, which is forcing states to return to quarantine restrictions, which is fraught with a new economic slowdown and a decrease in fuel demand, investment strategist BCS World of Investments Alexander Bakhtin added.
Nevertheless, after the US elections, the new president, whoever he is, is likely to expand the stimulus program, which, together with record low interest rates, will create the preconditions for a Christmas rally in the American market, which will spread to global stock indicators," Head of the Finam stock analysis department Natalya Malykh said.
Forecast for MOEX index and the ruble
According to forecasts of BCS World of Investments, at the beginning of next week, the MOEX index may get close to the level of 2,900 points, the ruble against the dollar can be traded in the range of 77-78 rubles.
Veles Capital believes that with the ability of the MOEX index to gain a foothold above 2,900 points, one can expect the development of an upward movement to around3,000 points. For the ruble, the upward correction may continue if currency pairs consolidate below 77.50 rubles in the case of the dollar (to 76 rubles) and below 91.50 rubles in the case of euro (to 89.50 rubles).
Freedom Finance target levels for next week for the MOEX index and the dollar and euro against the ruble are 2,775-2,930 points, as well as 76.15-78.80 rubles and 90.70-92.75 rubles, respectively.
