Our comments and expectations
External backdrop. The rebound in the S&P 500 paused after yesterday’s surge in oil prices. Recall that the index had been rising after testing its 50-day moving average and recovered to its highest levels since June 4. Quotes fell by 0.8% after a deterioration in relations between Iran and the U.S., which led to clashes in the Strait of Hormuz. Trump said the U.S. would resume the blockade of Iranian vessels transiting the Strait of Hormuz and would charge fees to all other ships passing through this waterway. Oil jumped by almost 10%. Against this backdrop, options traders priced the probability of a Fed rate hike in July at around 50%, after Fed Governor Christopher Waller said officials may need to raise rates to contain price pressures. Copper rose, while gold declined. This week, investors are awaiting U.S. inflation data and remarks by Fed Chair Kevin Warsh in Congress. In Europe, indices closed virtually unchanged. Today, negativity in Asian markets is coming mainly from chipmakers. South Korea’s Kospi managed to fall by 5% earlier today and then recover to neutral levels. S&P 500 futures are trading with a minimal gain of 0.05% today, while oil continues to rise and is already at $85.6 per barrel.
KASE Index. The KASE Index rose for a second consecutive session, fully recovering after the decline on July 8. Nevertheless, today from the market open prices are down 0.6%, indicating the local market’s return to the range-bound trend that has persisted since mid-June.
Index stocks. Yesterday, almost all stocks posted gains, except Kazakhtelecom. However, today the shares of yesterday’s leaders—Halyk Bank and Kaspi—are pulling back, while Kazatomprom is down 2.3%. The gains from yesterday were maintained by Air Astana and KazTransOil shares, but we cannot say that any positive technical changes have appeared on their charts. For AIRA, it is necessary to break the 670 tenge level to form stronger upside signals, and for KazTransOil—1160 tenge. As for HSBK shares, the correction will most likely lead to a pause in the latest attempt by the stock to rise. The emerging wave looked promising, and it is still not possible to say whether it has ended after the decline in shares at the market open. Solidcore shares are showing a decent rebound on AIX, despite yesterday’s drop in gold prices.
Currency. The tenge is strengthening today amid the jump in oil prices. After rising to 479 tenge, the dollar is down to 468 tenge today, which means a deviation of more than 1% from yesterday’s closing price. A retest of the 466 tenge support level is possible.