The main theme in global markets is that of uncertainty. Investors remain nervous and sidelined while waiting for a new catalyst or, more hopefully, for the current situation to settle down with no more negative surprises. That nervousness was reflected in the US markets yesterday (S&P ended down 0.3%) and in Asia’s markets today. The S&P Asia 50 Index is off 0.65%. That % move is more likely to be reflected in the Russian bourses when they open.

The main news affecting the Russian market is the half yearly MSCI changes. Raspadskaya is included (expected) along with OGK-4 (a surprise). Magnit was widely expected to have been included but, again, has been overlooked. Gazprom Neft has been excluded (no great surprise given its small free float). The weighting of Gazprom is to be increased while that of Norilsk Nickel is to be reduced. All changes to take effect from May 26th (more on these changes and the overall effect on Russia indices, etc, in a note later)

OGK-4 is one of our favourite stocks with upside to target price of over 50%.

The price of oil is holding up remarkably well in the midst of the current global market chaos and, especially, in the face of the stronger US dollar. The price of July delivery Brent last traded at $80.23 p/bbl while the equivalent WTI contract (still affected by storage problems in Cushing, Oklahoma) is at $75.73 p/bbl.

The dollar-euro rate is at $1.2611 (closed at $1.2698 last night) and the dollar-yen is at 92.50. The preference for relative havens is still the main theme.

Industrial metal prices are lower again today. Copper is off 1.9% in Shanghai trade. Gold last traded at $1,232.2 per ounce, up 1.0% and again reflecting the preference for haven assets.

Sugar continues to fall as supply forecasts steadily rise. The price is off 1.9%. Sberbank looks likely to get the full 81% of RusAgro shares that that it reported to have underwritten in the forthcoming IPO. Recently IPO’d Protek, dropped 5.2% to the USD equivalent of $3.47 yesterday. The share gained immediately after the listing, completed at $3.50 per share. It seems that the after listing support may now have ended and few new natural buyers have yet emerged.

The main economic news today will be the advance reading of eurozone 1st Qtr GDP. The consensus is for a 0.1% QoQ and a 0.5% YoY gain. The March industrial production number will also be published. A bad miss on these numbers will be quickly, and negatively, reflected in the dollar-euro market while “in line” numbers will be ignored. In the US, there are no major reports due today. The trade balance and federal budget reports are due but rarely have any sentiment impact.

Moscow’s bourses opened yesterday’s session with a predictable bounce as prices caught up with GDR/ADR price gains from Monday. But, there was little appetite to ad new positions as investors reflected the bout of nervousness in both Asian and EU markets. MICEX slide for most of the day before a late bounce as traders closed some shorts and added trading positions as the US markets started to reverse its opening drop. That late 1.4% bounce helped MICEX to a session gain of 3.5%, to close at 1,328.2, while the RTS added 3.4% to close at 1,415.9.

LUKoil was the best of the blue chips on MICEX, closing 10.2% better. Rosneft lagged with a more modest 4.6%. The worst performing share was Raspadskaya as investors reflected on the implications of the weekend accident. The price fell harder into the close after the company said it may take years to restore full production. The shares lost 24.0% by the close on MICEX. Other coal producers benefitted from the accident as they will now be able to increase production. Belon gained 16.6% and Mechel added 15.4%.

The ruble gained strongly, partly because of the general relief rally across emerging market currencies and partly because the price of oil gained through the day. The former has come about as traders again return to high yielding assets in developing economies having dumped many of these in the midst of the euro debt crisis last week. The price of July settlement Brent reached $80.62 p/bbl by the close of the ruble session on MICEX. By then, the ruble had gained 30 basis points against the dollar, to 30.287, and 52 basis points against the euro to end at $38.438.

Chris Weafer is the Chief Strategist of Uralsib Group http://www.uralsib.com