Our Comments and Expectations
External background. The U.S. stock markets ended in decline for the second consecutive day. The S&P 500 and Nasdaq indices fell by 0.3%. There were no major news events that directly influenced the markets. Recall that Powell previously gave a rather non-dovish comment regarding the future rate trajectory. This affected both the rise in bond yields and the dollar index. Freeport shares dropped by 17% due to force majeure at its Indonesian mine. Against this backdrop, copper prices rose by 3.6%. In early trading, S&P 500 futures are showing a slight increase. In Europe, the broad Stoxx 600 index declined by 0.3% with mixed trading results. The commodity and defense sectors gained significantly, while the automotive and luxury sectors fell. In Asia this morning, South Korea’s Kospi and Japan’s Nikkei showed modest growth. At the same time, Hang Seng added 0.4%, while China’s CSI 300 gained 0.9%. Oil prices rose by 0.7% following an unexpected drop in U.S. crude inventories by 607 thousand barrels.
Bonds. The yield on 10-year U.S. Treasuries rose notably from 4.1% to 4.15%, recovering all of Tuesday’s losses.
KASE index. Yesterday, the KASE index grew slightly by 0.2% and remains just above the local trend line. If the index gains more significantly today, a new wave of growth may begin.
Index stocks. Air Astana shares were once again the main driver of growth. The stock gained another 2.3% and rose by 5% over two days. Trading volumes remain elevated, although several times lower than Tuesday’s record levels. Toward the end of the session, large purchases were made at 800 tenge, and a breakout above this level could signal the first major reversal since the IPO. Shares of KazTransOil and BCC also rose by 1.4–1.5%. BCC continues its recovery attempts, though trading volumes remain low. KazTransOil exited its post-dividend sideways range this week and is moving toward new local highs, but volumes remained below average in 6 of the last 7 trading days. The previous leader, KMG, once again stopped near the upper trendline resistance. As expected, Kaspi declined following the weak ADR performance on Nasdaq. Yesterday ADRs fell again, but less sharply than the day before. The best performance came from Halyk Bank’s GDRs, which rose by 2.2% on the LSE.
Currency. The dollar fell by 2.2 tenge yesterday after strong gains on Tuesday. Trading volumes were lower than before. However, the gradual growth scenario remains relevant for now. If the dollar drops below 539 tenge in the coming days, this may mark the beginning of a global sideways trend.