Equities Update: Oil Plays, Lower Risk Indices To Fair Better

On March 23, we wrote that the regional equity bounce which began at the beginning of the month would run further (see Equity Bounce To Run Further March 23 in our online service) and we set short-term upside targets for the major indices in emerging Europe. The bullish call has played out very well, with most indices trading within 1% of our targets as of April 2. Going forward, we reiterate that whether stocks continue to trade higher will be dependent on external variables, specifically to the extent that risk appetite returns to the market on the back of gains in US equities and commodity prices globally. To be sure, the potential for continued upside is very much there but so too are the caveats we have also stressed including continued volatility and weak medium-term macroeconomic fundamentals. We highlight the key resistance levels to watch going forward, fundamental and technical signals of retracement, as well as the relative positioning of the varying markets in the region.

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