Our Comments and Expectations
External Background
Yesterday’s US market session was marked by a 17% plunge in Nvidia shares, wiping out $589 billion in market capitalization in a single session—an all-time record in stock market history. The main trigger for the decline was the breakthroughs of China’s AI company DeepSeek, which Nvidia representatives themselves called an "outstanding advancement in artificial intelligence."
The situation is further fueled by the fact that DeepSeek has been restricted from accessing Nvidia's technology due to US-China export limitations. Nevertheless, Nvidia denied allegations that the Chinese company had violated US export restrictions. The news was perceived as a threat to the US’s dominance in AI, as DeepSeek demonstrated its success without Nvidia’s cutting-edge chips. Donald Trump stated that DeepSeek's achievements should serve as a "wake-up call" for American industry. However, Nvidia pointed out that DeepSeek’s "superior" breakthroughs still rely on its chips, hinting at potential future supply deals.
Despite Nvidia and Broadcom shares plunging (-17.4%), most other sectors showed growth. In Europe, DAX and Stoxx 600 posted limited declines, aligning with previous signals of local market overbuying. In Germany, business sentiment unexpectedly worsened, with the Ifo expectations index dropping to 84.2 in January from 84.4 in December.
In Asia, Japan’s Nikkei 225 was down in early trading. On the commodity markets, oil, copper, and gold continued to decline. Uranium remains volatile, influenced by Kazatomprom’s production increase plans and the rollover of January contracts into February.
Bonds
US 10-year Treasury yields declined yesterday as investors sought safe-haven assets. Yields fell to 4.52%, matching the lows of January 2.
KASE Index
The KASE index is testing the 5,700 resistance level, gradually declining amid corrections in oil prices and global indices.
Index Stocks
Most stocks closed with slight losses yesterday, indicating a weakening market sentiment.
- Halyk Bank shares saw the biggest drop, following the performance of its GDRs on the LSE. The bank’s London-listed shares fell another 1.4% yesterday, briefly touching their 50-day moving average.
- Kazakh stocks are trading around 6% higher than their LSE counterparts, suggesting a potential correction today.
- Kaspi ADS performed well, and in the coming weeks, they are expected to reach and test the downward trendline and the 50-day moving average.
- Kazakhtelecom gained 2.2% yesterday, standing relatively close to its all-time highs from 2007.
- BCC shares are declining in early trading today, likely due to profit-taking rather than specific news.
Currency
USDKZT is trading at 516.1 this morning.
We still expect the exchange rate to reach the 513–514 range. February’s tax period may influence market dynamics, but we believe its positive impact on the tenge next month remains uncertain.