Our Comments and Expectations
External background. The S&P 500 rose for the fourth consecutive session and reached record highs following reports of the fastest U.S. economic growth in two years. Unlike the previous session, yesterday’s gains were driven mainly by technology giants, led by Nvidia, which rose by 3%. The macroeconomic report showed that the U.S. economy expanded at its fastest pace in two years, posting an annualized growth rate of 4.3% in the third quarter, supported by resilient consumer and business spending as well as a calmer trade policy environment. However, the report had little impact on expectations that the Federal Reserve will refrain from cutting interest rates in the near term. Scott Bessent stated that there is a possibility of revising the Fed’s 2% inflation target after the U.S. sustainably brings inflation down to that level. Other economic data showed consumer confidence declining for the fifth consecutive month and industrial production remaining unchanged. On the geopolitical front, the U.S. accused China of unfair trade practices related to microchips but refrained from imposing new tariffs for now. China, in turn, urged the U.S. to “immediately repeal” rules restricting the sale of non-U.S. drones and their components. In Europe, major indices posted more modest gains of around 0.2–0.3%. The Stoxx 600 once again reached new record highs. In Asia, markets this morning are showing mixed but moderate performance. Currency movements remain in focus, with the Chinese, Japanese, and Korean currencies continuing to strengthen against the U.S. dollar. Oil is trading around $62 per barrel this morning, gold is setting new highs at $4,520 per ounce, and copper has risen above $12,000 per ton for the first time. Futures on the S&P 500 index are down by 0.1%.
KASE Index. Yesterday, the KASE index managed to close flat after recording intraday declines for the second consecutive session. The daily candlestick shows a low of 6,908 points, indicating an intraday drop of 1.1%. Nevertheless, the final result was better than we had anticipated the day before.
Index stocks. Air Astana shares posted the strongest gains yesterday. GDRs on the LSE have already fully recovered after the SPO, while shares on KASE still need to gain another 2.7%. Notably, the recovery was surprisingly fast given the roughly 14% placement discount, and even faster than that of Halyk Bank, which appears fundamentally stronger than Air Astana. Overall, the rest of the market was either flat or declined by less than 1%. Halyk Bank continues to signal a pause in its upward momentum, while KMG remains in a downtrend. Kazatomprom GDRs showed a significant rise at the start of the session (around 10%) but failed to hold their gains and eventually closed up only 1.8%. Under current conditions, Solidcore shares look attractive, as gold remains in an upward trend.
Currency. The dollar fell to 508.6 tenge yesterday but is rising again today to 511.5. The Russian ruble is also weakening against the U.S. dollar.