External Background. U.S. stocks experienced a sharp decline yesterday due to a selloff in Big Tech stocks, influenced by several factors. Bloomberg reported that the U.S. is considering tightening trade restrictions with China. Additionally, Trump stated that Taiwan should pay the U.S. for its defense, and ASML provided a weak forecast for the third quarter. These developments triggered a selloff in the semiconductor sector, with the Nasdaq index plummeting by 2.9%, while the S&P 500 dropped 1.4%, and the Dow managed a 0.6% gain. The European Stoxx 600 index fell for the third consecutive day, losing 0.5%, largely due to a weak performance in the tech sector, which saw a 4.5% drop—its largest decline since December 2022. Asian markets mostly followed the U.S. downward trend this morning, with Japanese and Korean indices down by 1.5-2%, while Hong Kong and Chinese indices remained neutral. Oil prices rebounded by 1.6%, driven by a higher-than-expected drop in U.S. crude inventories and a 0.5% weakening of the dollar.
Bonds. U.S. 10-year Treasury yields remained unchanged at 4.16% on Wednesday.
KASE Index. The KASE index rose by 0.5% on Wednesday, largely driven by Kaspi.kz shares, which saw significant growth following the ADRs on the Nasdaq. The index remains in a local sideways trend.
Index Stocks. Kaspi.kz shares led the growth yesterday, increasing by 3.3% following Tuesday's rise in ADRs on Nasdaq. The local target of 66,000 tenge was reached, and now the market awaits the financial report (due on July 22) to determine further dynamics. While ADRs fell by 1.3% yesterday amid the overall decline in the broader U.S. market, a new high of $141.4 was set during trading. Financial company stocks in the U.S. continued to rise, so it’s recommended to hold Kaspi.kz shares for now. Another strong performer was Kcell, which grew by 1.1%. Despite hitting local lows, Kcell shares rebounded, though they still face downward pressure toward the 2,720 tenge level. Notable trading volumes of 200-300 million tenge per day have been observed recently. On the downside, Kazatomprom and Air Astana shares underperformed. Kazatomprom GDRs dropped by 1.9%, likely in response to the falling U.S. uranium sector, as the URA ETF fell by 4.4%, mostly within the first hour of trading. Air Astana shares dropped another 1.1% on KASE, while its GDRs on the LSE fell by 0.6%, pushing the discount on KASE shares to 7.4%.
Currency. The dollar appreciated slightly by 0.57 tenge yesterday, closing at 475.5 tenge. The exchange rate is likely to remain within a narrow sideways range in the near term.