Tenge is weakening against the background of the strengthening of the dollar in the global market

Our Comments and Expectations

External Background. The S&P 500 fell by 0.5% yesterday. Once again, volatile tech sector stocks were in the red: Nvidia lost 4.1%, while Tesla declined by 2.3%. However, in after-hours trading, Tesla shares rose by 4.15% thanks to a forecast of sales recovery this year and plans to launch robotics projects. Meta shares jumped 2.3% after the session ended, as Mark Zuckerberg predicted a "really big year" in which his AI assistant would become the most widely used. Microsoft dropped by 4.6% following a forecast of slowing growth in its cloud business.

Meanwhile, the US Federal Reserve kept its interest rate in the range of 4.25–4.5%. Jerome Powell stated that the Fed is in no rush to lower rates and is taking a pause to assess further progress in fighting inflation. However, analysts found his press conference to be "significantly less hawkish" compared to the Fed's official statement. In Europe, major indices performed better than in the US. The Stoxx 600 rose by 0.5%, while the DAX gained 1%, with both reaching new all-time highs. At today’s ECB meeting, a 25-basis-point cut in the deposit rate to 2.75% is expected. In Asian markets, there was a slight increase in Japan and Korea’s indices, while Chinese exchanges remain on an extended holiday. Brent crude oil fell below $76 per barrel and has started testing its 50-day moving average.

Bonds. There were no significant changes in the bond market yesterday. BNP expects bonds to remain subdued over the next few quarters.

KASE Index. The KASE index continues to move within a corrective wave. The local support level, represented by an ascending trendline, is very close and may provide support at 5,660 points. However, a long-term trendline extending from the deep correction of June 2022 lies slightly lower. If KASE’s movement responds to longer-term trends, strong support is likely in the 5,600–5,620 range.

Index Stocks. Stock movements within the index were mixed. Kazakhtelecom declined by 2.6%—a reversal has not yet occurred, but early signs are appearing. However, we believe that in the long run, its performance will depend more on incoming news than on technical factors. Halyk Bank remains quite volatile, especially on the LSE. After briefly reaching historical highs, its shares pulled back to support at the 50-day moving average of $19.24. Kazatomprom rose by 2.8% and has begun testing resistance levels. Uranium companies in the US market have started to recover after Monday’s drop.

Currency. The dollar has been rising from its December 26 lows and today reached 519.4 tenge. It is worth noting that recently (since December 20), the USDKZT pair has shown a strong correlation with the US Dollar Index (DXY)—so much so that it appears to be fully tracking the trends of the US currency rather than forming its own rate based on internal factors.