Our Comments and Expectations
External Background
The S&P 500 remained neutral for most of the session but managed to rise by 0.24% right before closing. This was enough to push the U.S. benchmark index to new all-time highs. Technology stocks were on the rise, though not those of mega-cap companies. Intel surged 11% after The Wall Street Journal reported that Broadcom and TSMC are considering potential deals that could result in Intel being split into two separate entities. According to a Bank of America study, traders have not been this risk-on about global equities since 2010. The cash levels of fund managers have fallen to their lowest in 15 years, while 34% of respondents expect global stocks to be the best-performing asset class in 2025. Mary Daly of the Federal Reserve stated that the regulator’s policy should remain restrictive until more significant progress is made in tackling inflation. European indices posted moderate gains yesterday, similar to the S&P 500. In Hong Kong, the Hang Seng index rose by 1.6%, reacting positively to Xi Jinping’s meeting with major business leaders. This morning, South Korea’s Kospi is once again the top performer. The U.S. and Russia have both stated that they are open to discussing lifting sanctions on Moscow as part of potential peace talks regarding the conflict in Ukraine. Despite these statements, Brent crude oil prices have been rising for three consecutive sessions, now trading above $76 per barrel.
Bonds
The 10-year U.S. Treasury yield rose to 4.55% yesterday, surpassing its 50-day moving average.
KASE Index
The KASE index confirmed its technical buy signals, rebounding 1% yesterday and adding 0.3% today at the open. At the same time, the U.S. dollar has started to strengthen.
Index Stocks
The KASE index is already in recovery mode, drawing attention back to stocks that dropped during the recent correction phase. Air Astana led the gains, rebounding immediately after briefly falling below 700 KZT. Yesterday, the company announced the completion of the first phase of its share and GDR buyback program, suggesting a potential launch of a second program. This likely triggered buying activity. Additionally, we had anticipated that investors' risk appetite would outweigh negative sentiment toward the stock, leading to a rebound from local lows. In the short term, the stock could return to 825 KZT. Kazakhtelecom is also showing solid growth, indicating a recovery from losses incurred between January 29 and February 10. On the London Stock Exchange (LSE), Air Astana was also the top performer. Uranium prices dropped by 1.5%. Discussions about the possible removal of sanctions on Russia could put downward pressure on nuclear fuel prices.
Currency
This morning, the U.S. dollar has rebounded to 503.8 KZT, as we expected. If the current trend continues, we anticipate a move toward 510 KZT in the short term