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Developing markets have been through the best week since September due to Russia

The stock market has been through the best week since September, Russian stocks have updated the historical records.

09.Dec.16 6:57 AM
By Anna Tuzova


Developing markets have been through the best week since September due to Russia
The recovery of demand for risky assets since the begging of December combined with higher commodity prices and the improvement of production and trading data have enhanced developing markets asset positions. MSCI Emerging Markets index prepares to finish the week by 3 per cent higher than the previous week. This is its best rate since the end of September, including through the growth of Russian’s stock market to a record-high levels.

The MICEX index gained 3,6 per cent in a week, which is the best result since February. The index has updated an all time high by getting more than 2200 points.   The facts which contributed to that were growing oil prices and the hope for lifting the sanctions against Russia.

“Russia is still looking attractive. Oil should be relatively stable next year,” according to the Rabobank economist Piotr Matys. “They have a central bank which is cautious when it comes to cutting rates and an economy which is recovering from recession, and if you look at political events in Europe, Russia seems like an oasis of stability.”

The market expects the US Federal Reserve to increase rates by 25 basis points the next week.

As the analyst said, "We think markets got ahead of themselves, and as long as the Fed signals they will raise rates gradually in 2017, we won't witness significant capital outflows". 

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