Our comments and expectations
External background. The S&P 500 has once again (15th this year) updated historical highs. Stocks in the index rose throughout almost the entire session, slowing down slightly at the end. The technology sector has performed well, especially for paper companies producing chips and semiconductors, as well as software. At the same time, the market ignored unexpectedly weak indicators of the ISM business activity index and the growth of consumer sentiment. In parallel, Congress approved temporary funding for the U.S. government. The Stoxx 600 also showed an increase of 0.6%, as well as other regional indices. Japan and Korea have been growing in the Asian markets since morning. Hong Kong's Hang Seng shows a slight decline. In China, the government said more than $28 billion in bank loans had been approved for real estate projects, another sign of market support. Nevertheless, according to BofA, Chinese market ETFs saw an outflow of about $1.6 billion, which is the largest weekly loss of funds since October.
Bonds. The yield of 10-year US bonds declined on Friday and went down from local consolidation. Torsten Slok, chief economist at Apollo, told clients not to expect the Fed to cut rates this year as the U.S. economy recovers and core inflation rises.
The KASE index. After a short pause, the KASE index showed an increase of 0.7% as BCC returned to the game. New highs were not reached, but the market gave a hint that it could continue the rally and prevent a downward divergence from forming on the daily chart. Today, some of the activity on KASE may decrease due to the earthquake that occurred at 11:22 a.m., which may affect individual stocks.
Index shares. CCBN shares rose 3.4% and moved up from the recent consolidation to the highest since August 2008. Most of the other stocks were also in a small but still positive position. This does not mean that all the growth was only due to the securities of the BCC. Kazatomprom was among the leaders of the decline. However, on Sunday, news came out that the uranium enrichment industry in the United States will receive an infusion of $2.7 billion as part of a government funding bill. The bill is not new, but in any case, the effect of the news may provoke shares in the uranium sector to grow. In addition, it would be very useful, since the GDR of Kazatomprom began to break down the boundaries of the ascending channel, which is a negative technical sign for quotations. Air Astana on the LSE showed an increase of 2.2%, which signals the end of the correction wave that began after the placement. Support was fixed at $9.5. We are waiting for a response on KASE.
Currency. The dollar is making a second and more serious attempt to break through the resistance levels. In the morning, USDKZT quotes are rising to 454 tenge, breaking through the 50-day moving average. This may be a direct consequence of the negative factors for tenge described in the previous review.
Key market news
(=) Economics: Standard & Poor's confirms Kazakhstan's sovereign credit rating