Our Comments and Expectations
External Background
On Friday, the main topic of discussion and market concern was Trump’s tariffs. The S&P 500 index started declining in the middle of the session after the announcement of a 25% tariff on most goods from Canada and Mexico and a 10% tariff on Chinese and Canadian energy products, effective from February 4. Canada announced its intention to introduce retaliatory tariffs, while Mexico promised to provide details today. China, through a statement by Xi Jinping, also threatened to take action within the WTO framework. Today, it became known that Trump is planning to impose tariffs against the EU as well.
Additionally, Trump stated that he supports the Federal Reserve’s decision to keep interest rates unchanged. Michael Hartnett from Bank of America, known for the term “Magnificent Seven,” warned that shares of major U.S. tech companies could turn into the “Lagnificent Seven” this year.
In Europe, major indices closed neutral on Friday, but today, the tariff issue is putting significant pressure on the market: Stoxx 600 futures are down 2%, DAX is down 2.1%, and FTSE 100 is down 1.3%. The euro is losing nearly 1.1% against the dollar.
China’s Caixin Manufacturing PMI declined for the second consecutive month in January, reaching 50.1 (forecast: 50.5), marking the lowest level in four months (compared to 50.5 in December). Japan’s Nikkei 225 is down 2.7%. Oil prices rose to $77 per barrel in the morning but later returned to their starting levels. S&P 500 futures are down 2%.
Bonds
On Friday, U.S. 10-year bond yields showed slight growth, which has already been corrected this morning.
KASE Index
On Friday, the KASE index closed its fifth consecutive session with a negative result. The Relative Strength Index (RSI) is at 45, which does not yet indicate an oversold market. Moreover, Monday morning started with turbulence in external markets, where a 1-2% decline is observed, which could put pressure on the local market today.
Index Stocks
On Friday, stocks showed moderately positive dynamics. The biggest loser was Kazakhtelecom, which has been in a correction phase for several sessions and continues to decline after the market opened. ADS Kaspi shares on Nasdaq fell again, interrupting the recovery that began on January 13-14. Kazatomprom GDRs rose by 1.5%, but this did not lead to significant changes in the technical picture. This morning, the index is down 0.7%, with KMG and Halyk Bank stocks among the biggest decliners.
Currency
In the morning, the dollar rose to 522.5 tenge, breaking above the 50-day moving average and signaling a recovery after the tenge's recent strengthening. This movement closely follows the global dollar trend, particularly on the DXY index chart. The National Bank announced that it would sell $550-650 million in February for budget transfers, as well as $479 million within the framework of mirror operations. The upcoming February tax period should also be taken into account.