Our Comments and Expectations
External Background. The S&P 500 rose by 0.1% yesterday but closed below the session opening level. The market was saved from a deeper decline thanks to a new wave of optimism in artificial intelligence, which supported tech stocks. Yesterday’s initial jobless claims data was delayed, and today’s labor market report will also be postponed. Scott Bessent told CNBC that the next round of trade negotiations between the U.S. and China should lead to a “fairly major breakthrough.” In Europe, quotes continued to rise, with the Stoxx 600 reaching new highs. In Asia this morning, tech companies also continued their growth, particularly Japan’s Hitachi and Fujitsu, which announced partnerships with OpenAI and Nvidia. Oil fell for the fourth consecutive session, dipping below $65, but is showing a slight rebound today.
Bonds. The yield on 10-year U.S. Treasuries declined again, reaching 4.08%.
KASE Index. KASE fell by 0.3% yesterday. Based on the previous session closing levels, the index did not drop below the earlier broken resistance levels. However, the situation does not yet look reliable: if prices decline again today, the breakout may be considered false, bringing the market back into its prior sideways trend.
Index Stocks. The strongest growth in yesterday’s session came from Air Astana. Two important points should be noted: yesterday buyers failed to break through the 835 tenge resistance level and pulled back. Today, however, we see growth to 837 tenge at the opening and technical signals indicating potential for a broader mid-term recovery. The sharpest decline yesterday was, as expected, in Kaspi. On Nasdaq, ADS slowed their decline but remain in a negative trend. Other stocks showed little movement. Kazatomprom closed neutral on the LSE yesterday, although uranium ETFs rose by 2.3–4%. The lack of response from KAP can be explained by already high exposure to these sectoral funds. Yesterday, we received several questions regarding a possible new placement of Kazatomprom shares. Based on the limited information available, the company may issue up to 25% of its stake while keeping 51% under state ownership. We tend to believe that the additional placement will not occur on new exchanges but rather remain on existing ones (LSE, AIX, KASE) to boost their liquidity. The option of seeking a new exchange, as was the case with Kaspi, currently seems less likely. At today’s market open, we see the KASE index down 0.4%, with KazTransOil shares leading the gains. It is worth noting that these shares have been showing steady growth since breaking the 820 tenge level on September 22. At present, prices are at their highest since May 29, ahead of the annual dividend cutoff.
Currency. The dollar is rising against the tenge this morning after two sessions of declines. On one hand, this indicates consolidation dynamics after an unsuccessful test of the 550 tenge level; on the other hand, USDKZT quickly recovered to 548.3, which may be interpreted as a new retest of resistance levels.