Our comments and expectations
External Background. The S&P 500 rebounded after a sharp decline on Friday, rising by 1.2%, but still remained below its 50-day moving average. Tesla shares performed well, gaining 2.6%, and Nvidia jumped by 3.5% after a 4% drop on Friday. HSBC stated that labor market data points to a slowdown rather than an imminent recession, prompting them to increase their long position in U.S. stocks based on steady third-quarter earnings forecasts. Savita Subramanian of BofA believes that high volatility in the short, medium, and long term will make utility and other quality stocks more attractive compared to growth stocks. Citigroup, however, warns that the U.S. stock sell-off has made the major indices vulnerable to further declines. Ahead, markets are awaiting the release of the U.S. Consumer Price Index (CPI) report on Wednesday. Economists surveyed by Bloomberg expect the CPI to have risen by 2.6% in August compared to last year, marking the smallest increase since 2021. In Europe, major indices also posted gains, ranging from 0.8% to 1.1%. In Asia, the Nikkei 225 and Kospi were recovering after early trading losses. Japan's economy grew by 2.9% year-over-year in the second quarter, below initial estimates. The Hong Kong Hang Seng continues to decline, and the mainland CSI 300 is nearing February lows. China's core inflation fell in August to its lowest level in three years, while the main indicator also fell short of expectations for consumer spending growth. Oil fell to $70.7 but then recovered slightly. Morgan Stanley lowered its Brent price forecast for the fourth quarter to $75.
Bonds. The yield on U.S. 10-year treasuries dipped slightly below 3.7%. Corporate bonds rose by 0.2-0.3%.
KASE Index. As feared, Friday's sell-off in global markets also affected KASE. Quotes fell by 0.6%, moving further away from recent all-time highs. On the other hand, yesterday’s recovery in global stock markets may help stabilize the situation.
Index Stocks. On KASE, only Halyk Bank was in the green. Leading the declines were shares that also have ADS and GDR—Kaspi.kz, Kazatomprom, and Air Astana. Despite market instability, Kazatomprom stock managed to rise for the second consecutive session, though this did not significantly affect its technical outlook. Air Astana shares fell by 2.1%, hitting a new all-time low. Besides Halyk Bank, defensive stock KEGOC performed well, falling by just 1 tenge.
Currency. The dollar’s decline against the tenge has stalled near a local upward trendline. As mentioned yesterday, the 50-day moving average for the USDKZT pair is also at this level, so technical resistance levels will actively prevent further strengthening of the tenge.