Our Comments and Expectations
Background. The U.S. stock markets ended lower for the third consecutive day. The S&P 500 and Nasdaq fell by 0.5%. Yesterday, positive U.S. GDP growth data for Q2 came in above expectations. On the other hand, jobless claims fell below forecasts, but job growth was almost three times lower than last year. This reduced market confidence in a further Fed rate cut. S&P 500 futures are showing neutral dynamics this morning. In Europe, the broad Stoxx 600 index fell by 0.7% as the healthcare sector dropped 1.9% following the launch of a U.S. investigation into tariffs on medical equipment. In Asia this morning, stocks are broadly declining due to Trump’s introduction of 100% customs duties on pharmaceuticals starting October 1. South Korea’s Kospi fell 2.6% and Japan’s Nikkei lost 0.7%. Meanwhile, Hang Seng declined by 0.6% and China’s CSI 300 by 0.4%. Oil prices rose 0.7% amid a partial ban on diesel exports and an extension of the gasoline export ban from Russia until year-end.
Bonds. The yield on 10-year U.S. Treasuries rose slightly to 4.18%, reaching its highest level since September 4. However, it remains below the upper boundary of the downward trend.
KASE Index. The KASE index rose by another 0.3% yesterday and continues to slowly rebound above the local trendline. Quotes are approaching highs and may break through in the coming days.
Index Stocks. Yesterday’s main growth drivers were BCC shares, which gained 3.2%. Prices approached the upper boundary of the local trendline, where a pullback is possible. Trading volumes remained relatively small despite the strong growth. Air Astana shares rose again, this time by a modest 0.9%. The price reached 807 tenge, the highest level since February, but volumes decreased. If the stock consolidates around this level for a few days, the probability of a major reversal will rise sharply. KazTransOil shares grew by 1.4% for the second consecutive day. The stock is likely to close its dividend gap, and the renewed market interest can be seen as the first stage of price growth toward the next dividends. Among Thursday’s laggards were KMG and Kazatomprom, down 0.8% and 1.1% respectively. KMG still fails to break the upper trendline. Kazatomprom showed neutral dynamics on the LSE: trading opened with a decline, but shares recovered losses only after KASE closed. This likely explains the decline observed yesterday on KASE.
Currency. The dollar rose by 0.45 tenge yesterday, after falling more than 1.5 tenge intraday. Nevertheless, following the recent breakout from the “flag” pattern, we maintain a gradual growth scenario as the main one, with a target resistance level of 544–545 tenge. Trading volumes were significantly higher than on Wednesday, possibly indicating a large buyer around the 541 tenge level.