Rouble weakens on COVID threat, Sberbank pays dividends

Credit: REUTERS/MAXIM SHEMETOV

The rouble eased on Tuesday, under pressure from rising COVID-19 cases at home and abroad as well as fading optimism over a potential U.S. stimulus package, while stocks inched higher, with shares in Russia's top lender Sberbank outperforming peers.

Adds detail, comment, updates prices

MOSCOW, Oct 20 (Reuters) - The rouble eased on Tuesday, under pressure from rising COVID-19 cases at home and abroad as well as fading optimism over a potential U.S. stimulus package, while stocks inched higher, with shares in Russia's top lender Sberbank outperforming peers.

At 1026 GMT, the rouble was 0.2% weaker against the dollar at 77.885 RUBUTSTN=MCX and had lost 0.6% to trade at 91.96 versus the euro EURRUBTN=MCX, moving towards its weakest level since early 2016 of 93.32 it hit last month.

Russia reported a new record daily high of 16,319 coronavirus cases on Tuesday after authorities insisted strict restrictions to contain the virus were not needed.

Russia's central bank, which slashed rates this year to help the economy amid the coronavirus crisis, is expected to keep rates on hold this Friday ahead of the U.S. presidential election.

Given the rouble's weakening of the past few months, the central bank is likely to hold the key rate at 4.25% but may maintain its dovish tone regarding its future policy, said Valentin Zhurba, head of investment at MKB Private Bank.

"In the coming sessions we expect the dollar to maintain its position in the range of 77.5-80 roubles, seeing no reason to go beyond this border," he said.

Alleged Russian hacking attempts were in the spotlight after Britain and the United States on Monday condemned what they said were a litany of malicious cyberattacks orchestrated by Russian military intelligence.

Russian stock indexes were up after dropping in early trade.

Shares in Sberbank SBER.MM rose 2.2% after it said it had started paying 2019 dividends to the tune of 422.4 billion roubles ($5.43 billion), a record high for the Russian market.

Dividend payments can harm the rouble as investors sometimes convert rouble-denominated proceeds into foreign currency.

The rouble-based MOEX Russian index .IMOEX was 0.7% higher at 2,814.4 points, bouncing off its lowest mark since July 20 hit earlier on Tuesday.

The dollar-denominated RTS index .IRTS was up 0.4% to 1,139.3 points, close to a more than five-month low.

For Russian equities guide see RU/EQUITY

For Russian treasury bonds see 0#RUTSY=MM

($1 = 77.7800 roubles)

(Reporting by Alexander Marrow and Andrey Ostroukh; editing by Emelia Sithole-Matarise and Mark Potter)

((alexander.marrow@thomsonreuters.com; +7 495 775 1242;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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