Our Comments and Expectations
External backdrop. The S&P 500 rebounded 1.66% yesterday after falling to its lowest level since June 26 on Wednesday. Technology stocks, semiconductor manufacturers, and mega-cap companies led the gains. The Nasdaq outperformed other major U.S. indices, rising 2.8%, compared with a 1.2% increase in the Dow Jones Industrial Average.
Microsoft shares surged 15.5% after the company reported its strongest cloud business growth in four years. In after-hours trading, Amazon.com announced that revenue from its cloud division had grown for the fifth consecutive quarter, sending its shares up 9.55%. Meanwhile, Apple shares fell 6.3% as the company's sales in China and services revenue grew more slowly than analysts had expected.
A fresh batch of important economic data was also released. The U.S. economy expanded by 1.5% in the second quarter, below expectations, despite solid consumer spending. The Federal Reserve's preferred inflation measure rose 0.1% in June, slightly below forecasts.
Oil prices fell to $89 per barrel yesterday despite new U.S. strikes on Iran, targeting military facilities during a two-hour operation. In addition, the conflict appears to have expanded to Egypt after two vessels transporting liquefied natural gas were attacked off the country's Mediterranean coast.
In Europe, major continental indices gained 0.6–0.9% following reports that the eurozone economy unexpectedly grew by 0.4% in the second quarter, marking its strongest growth in more than a year.
Asian markets showed an unusual picture this morning. The highly volatile Kospi surged nearly 18%, while the Nikkei 225 gained 4%, despite yesterday's 3% appreciation of the Japanese yen. Brent crude is trading at $86.2 per barrel, while S&P 500 futures are up 0.4%.
KASE Index. KASE ended yesterday's session on a neutral note, without generating any significant technical signals. Today, however, the backdrop for the local market has become highly favorable. As a result, the index is up 0.9% at the opening, breaking above its local sideways trend and gaining a good chance of reaching the June highs near 7,850 points.
Index constituents. The main positive driver yesterday came from our GDRs. Halyk Bank's GDRs jumped 3.7% on the London Stock Exchange and are adding another 0.9% today. As a result, the shares have reached their highest level since May 14 and may continue recovering after the significant decline seen in April and May.
Kaspi gained 2.2%; however, no new technical breakout occurred. The stock recovered part of its July losses after rebounding from its 50-day moving average.
A similar pattern can be seen in Kazatomprom's GDRs. After breaking below several Fibonacci support levels, the shares finally rebounded from the $62.4 level. Following yesterday's 2.6% gain, the GDRs are up another 3.4% after the LSE opening, increasing the likelihood of a strong session on KASE today.
Meanwhile, Bank CenterCredit shares continue to advance on KASE, gaining 2% today. Kazakhtelecom shares are also up 2.4%, maintaining a strong upward trend.
Currency. USD/KZT declined to 474 yesterday, indicating that it is still unable to establish itself above the 50-day moving average. The Russian ruble has also stopped weakening against the U.S. dollar.