Our comments and expectations
External backdrop. The S&P 500 rose 0.4% yesterday after falling 0.8% the day before. The focus was on moderate inflation data, which partly eased market pressure stemming from the jump in oil prices. Consumer prices in June declined 0.4% m/m for the first time in six years. The annual figure rose 3.5% y/y versus 4.2% a month earlier, coming in better than market forecasts. Core CPI was unchanged m/m and slowed to 2.6% y/y from 2.9%. The main driver was a 5.7% drop in energy prices, including gasoline — down 9.7%. The Fed is expected to take this data into account despite the escalation of the conflict in the Persian Gulf. Meanwhile, speaking before U.S. lawmakers, Fed Chair Kevin Warsh said central bank officials will not tolerate high inflation, reaffirming their intention to rein in price growth. The market also received support from banking-sector companies, which began reporting in the new quarterly earnings season. Nevertheless, there were also crushing declines — IBM shares fell 25% in the post-market on weak sales figures. In Europe, performance again proved neutral. This morning in Asia, sentiment is positive: Korea’s tech-heavy Kospi is up 6.2% after ASML Holding raised its annual sales forecast for the second time this year. The Hang Seng and Nikkei 225 are each up 1.5%. Brent is beginning to test the last of three key dynamic resistance levels — the 100-day moving average — and is trading at $86.3 per barrel this morning. S&P 500 index futures are up 0.1%.
KASE Index. There are no major changes on KASE. Yesterday quotations fell 0.8%, but this is within a sideways trend, so there are no technical surprises for now.
Index stocks. Yesterday saw a corrective session — some of the stocks that posted gains in the session before last rolled back. The hardest hit were names linked to Western markets — Kaspi and Kazatomprom. KZAP shares worsened their initial results by the end of the session and deepened the decline to 2.3%. Today the shares are down another 0.6% and are fairly close to the May 21 lows, where a support level is also located. A similar test of the support level is also taking place on the LSE. While Kazatomprom maintains high volatility, KMG shares have almost completely lost it — quotations have barely moved for five sessions in a row (including the current one). The biggest gain among GDRs was shown by Air Astana; however, weak liquidity does not yet allow us to speak of a high probability of a reversal in the current situation. At today’s open, prices remain stable, while Kazakhtelecom is rising the most, having started a growth wave after a prolonged decline.
Currency. The tenge is regaining ground against the dollar, and USDKZT quotes are moving below 470 tenge. In addition, we note that the ruble has again begun to weaken against the dollar and has reached 78.