Our comments and expectations
External backdrop. Geopolitics returned to the center of attention after Trump’s statement about ending the truce with Iran and threats of new strikes. The reaction in oil was sharp: Brent rose another 5%, at one point reaching $80 per barrel, restoring the risk premium lost earlier. As a result, performance on U.S. markets was mixed: the Dow Jones fell 1.1%, the S&P 500 lost 0.3%, while the tech-heavy Nasdaq gained 0.2%—meaning cyclical and defensive names that had risen well in recent sessions were the ones that suffered. The materials sector had its worst day in more than a year; airlines and cruise operators declined on higher fuel costs, while oil and gas stocks rose. The published minutes of the Fed’s June meeting showed a divided committee: some participants believe that by year-end the rate should be within or slightly below the current range, while many others think it should be higher, and several people argued for a hike as early as June due to the inflationary effect of the war and the AI boom. In Europe, the sell-off was deeper: the Stoxx 600 lost about 2%, Germany’s DAX fell more than 2%, and the UK’s FTSE 100 dropped 1.7%. In Asia, Korea’s Kospi entered a bear market, losing about 20% from its June record amid an ongoing sell-off in chips. However, this morning Asian markets are bouncing along with the Nasdaq and the S&P 500.
KASE Index. The KASE Index ended yesterday with a noticeable decline of 0.82%. After such a move, the probability of a retest of the local horizontal support at 7,550 points is high. At the same time, 8 out of 10 stocks fell in price yesterday, and the performance on international exchanges was not the most positive, which could lead to a further decline in the index.
Index stocks. The biggest drop yesterday was in Kazatomprom shares (-2.8%). The GDRs in London showed the same move, and the 4.5% premium in the shares remains, which will also weigh on the price on KASE. Note that the closing price was the lowest since mid-January, and it also formed below recent lows and the 200-day moving average. All this increases the likelihood of further decline in the short term to $63 per GDR, where the nearest horizontal support for the papers is located. Halyk Bank GDRs also slipped slightly, which, unlike Kazatomprom, are still holding above the required levels and have chances for a rebound. Kaspi GDRs moved below the local upward trend and may pause their growth for a few days. Air Astana fell 1.4% yesterday, without even attempting to test the level of 670 tenge. Additional pressure on these securities also came from the dollar exchange rate, which at one point showed a significant decline.
Currency. USDKZT edged down slightly yesterday by the end of the day and remained above the level of 469 tenge. The scenario of moving below 469 with a further new wave of decline to 464 remains quite likely, and much will become clearer over the next few days. The RUBKZT cross rate slipped slightly to 6.1.