Daily Insight. Equities show modest gain; market recovery dependent on inflation, natural gas and steel prices

Yesterday, the equity market staged a modest rise as the PFTS index gained 8.91 points and increased by 1.4%, reaching 645.92 as of end of the trading session. Total equity turnover in the PFTS amounted to UAH36.6m (US$8m, while bond market trading volume ended the day at UAH392.7m (US$85m).

All shares, which constitute an index basket, except for fixed-line telecommunication giant Ukrtelecom and Ilyich Iron and Steel Works, have seen their prices rising. Ukrtelecom\'s share price lost about 2% on the day, reflecting investors\' fears about its profitability as government officials recently said the state-controlled company is expected to end the year in the red.

As yesterday\'s recovery was rather broad, judging from PFTS basket constituents, we still view this as a temporary uplift because of the three looming risk factors, namely, inflation, natural gas prices, and steel prices (please read today\'s Economic Insight note for more detailed view).