Oil returned to $120 per barrel

Our Comments and Expectations

 

External backdrop. The S&P 500 closed flat despite another surge in oil prices. Brent is updating its March and April highs this morning, with various sources pointing to a range of $119–124 per barrel. The trigger was a report by Axios that Donald Trump will be briefed on new military options against Iran. Earlier, the U.S. president told the outlet he would not lift the naval blockade without a nuclear deal.

Meanwhile, the Federal Reserve System kept interest rates unchanged and signaled that tensions around Iran are clouding the economic outlook. Reports indicate the meeting was marked by disagreement, with some participants opposing policy easing. This suggests that a rapid rate-cut cycle may not be supported within the Fed, especially as Kevin Warsh is being considered a potential new chair.

Following the decision, traders began pricing in a 50% probability of a rate hike by April 2027 amid persistent inflationary pressure. Investor focus was also on major tech earnings — shares of Alphabet and Amazon rose in post-market trading after strong results, helping limit deeper declines in futures. Looking ahead, investors await PCE deflator data — the Fed’s key inflation gauge. It is expected to rise by 0.3% in March, pushing the annual rate to 3.2% amid falling goods prices and rising services prices. U.S. GDP growth is also expected at around 2.3% YoY. Asian markets are down about 1% this morning, while S&P 500 futures are losing 0.4%.

 

KASE Index. KASE closed flat yesterday, although intraday it declined to 7732 points (-0.8%). Trading volumes dropped to their lowest since April 17. Most index components ended the session without significant price changes.

 

Index stocks. A shadow on the daily chart formed due to intraday declines in shares of Halyk Bank, Kcell, and Kaspi.kz. HSBK shares fell to 384 tenge but were bought up and are rising today. We believe the dividend correction has already ended, and prices may gradually recover.

In previous years, such corrections lasted longer, but their duration shortened after the bank switched to semiannual dividend payments. On the London Stock Exchange, GDRs fell by 2.1%, though total losses were smaller than on KASE. The biggest decline was recorded in KazTransOil shares, which remain in a downtrend after reaching 1300 tenge on March 19.

Today, it will be interesting to assess the performance of KZTO and KMGZ shares amid new “military-driven” highs in oil prices.

 

Currency. The U.S. dollar rebounded to 463 tenge yesterday. Today, USDKZT shows slight strengthening of the tenge to 462.6, while the local downtrend of the dollar remains intact for now.