Our Comments and Expectations
External backdrop. The S&P 500 closed yesterday’s session flat, recovering after a weak market open. The main trigger for the decline was inflation data: in April, headline inflation in the U.S. rose by 0.6% month-over-month, in line with expectations, driven by higher fuel prices. The annual Consumer Price Index accelerated to 3.8%, marking the fastest pace since 2023. Core inflation exceeded forecasts, rising to 2.8%. Markets now believe that accelerating inflation combined with a stable labor market makes a near-term Federal Reserve rate cut unlikely. The yield on 10-year U.S. Treasuries climbed to 4.46%, the highest level since July 2025. Oil prices also added pressure after Trump questioned the sustainability of the ceasefire with Iran, fueling concerns about prolonged disruptions in the Strait of Hormuz. As a result, oil rose 3.4%. In continental Europe, major indices posted steeper declines, though they shifted to recovery at today’s market open. In Asia this morning, all major indices are trading higher except Hong Kong’s Hang Seng, while China’s CSI 300 reached its highest level since 2021. Futures on the S&P 500 are up 0.1%. Brent crude is showing a slight pullback after yesterday’s session.
KASE Index. Yesterday, the KASE index showed a sharp decline across most stocks amid the highest trading volumes of the year. It is difficult to say definitively whether this was a broad market sell-off or a coincidence of negative factors affecting individual stocks. As a result, the index fell below the local support zone near 7,690 points. For now, this is not yet a critical signal, but a break below the next support level at 7,560 points could significantly worsen the technical outlook.
Index stocks. Elevated trading volumes were observed in half of the index constituents, with the largest volumes recorded in KazMunayGas shares at 7 billion tenge and Kazakhtelecom shares at 3.3 billion tenge. The biggest decline was posted by Kazatomprom: its GDRs fell 8.8%, while local shares dropped 7.1%. The uranium sector as a whole also remained under pressure, likely reacting to the negative start of the previous U.S. trading session. Investors should note that among dual-listed stocks, Kazatomprom continues to trade at the highest premium on the local market — about 8% based on yesterday’s close. This could intensify the correction on KASE. Other stocks are trading either at comparable levels or at a discount, as in the case of Kaspi (-2.5%). HSBK shares on KASE declined 2%, while its GDRs on the LSE gained 0.8% and at one point attempted a rebound of up to 2.3% before coming under pressure again. KazTransOil maintained its upward momentum yesterday, although we believe the rally could slow down or face a local correction in the near term.
Currency. The U.S. dollar is attempting to strengthen today — USDKZT is breaking above the local trend line and testing resistance near 466.2 tenge. We remind that for a full trend reversal, the dollar must also break above the medium-term descending resistance line located higher.