Our Comments and Expectations
External Background. Yesterday, the S&P 500 made a fairly strong reversal and ended the session with only a slight decline of 0.23%. The VIX volatility index also showed that investor tension eased throughout the day. Trump stated that he is not considering suspending his plan to impose additional tariffs on dozens of countries but hinted that he might be open to negotiations. Treasury Secretary Scott Bessent said that nearly 70 countries have already approached the U.S. requesting to initiate talks. On the other hand, there is growing panic in the market with voices claiming that the global economy is heading towards an “economic nuclear winter” or a “massive avalanche.”
Meanwhile, China vowed to retaliate within hours after Trump announced an additional 50% import tariff and intensified efforts to support its economy and markets. In Europe, indices dropped by 4.1–4.5%, but today they are showing gains from the opening — DAX and FTSE 100 are up by 1–1.2%. In Asia, Japan’s Nikkei 225 is leading the gains, up 6%, following Trump’s instruction for two cabinet members to start bilateral trade negotiations after a phone call with Japan’s Prime Minister. The Hang Seng, which lost 13.2% yesterday, is rebounding by 2%.
The People’s Bank of China announced that it would provide support to the sovereign wealth fund if needed to ensure capital market stability. Oil is currently trading at $64.1 per barrel, while S&P 500 futures are up 1.7%.
Bonds. The easing of investor tension during yesterday’s session led to a correction in U.S. Treasury prices — the yield on 10-year bonds surged to 4.18%.
KASE Index. Yesterday’s session on the KASE ended significantly better than it began, indicating a similar pattern to the S&P 500. Quotes were bought back from the 5375-point level and closed at 5497. Today, trading has started on a more moderate note, with a gain of 0.1%.
Index Stocks. At the market open today, Kazakhtelecom shares are showing the largest drop — down 2.37%. Nevertheless, the local upward trend is still intact, and prices are about 5% away from their recent highs. BCC is recovering part of yesterday’s losses, up 1.85%. The correction over the past three sessions has held back attempts to break important local resistance levels, although technically, nothing has changed for the stock.
Yesterday, all of our GDRs on the LSE declined, and the drop was rather painful. However, since European markets are opening in positive territory today, we expect GDRs to rebound as well. In our view, Halyk Bank shares look locally attractive as they are supported by their 50-day moving average. On Nasdaq, Kaspi shares closed flat.
Currency. The dollar reached 525 tenge yesterday, but today it has retreated to 517. Interestingly, the ruble also weakened on the USDRUB chart in line with the tenge. The DXY index rose for the second consecutive session.