Our Comments and Expectations
External background. U.S. stock markets closed yesterday with mixed results, while intraday quotes were volatile amid the Fed’s rate cut. The S&P 500 and Nasdaq fell by 0.1% and 0.32% respectively, while the Dow gained 0.57%. The Fed cut rates by 25 bps as expected but signaled gradual easing through year-end, largely due to labor market weakness. Two more rate cuts are projected by year-end — totaling 50 bps. The probability of a rate cut at the October meeting rose from 72% to 86% according to market pricing. Nvidia shares fell again on news from China, where, according to the FT, regulators banned local giants from using Nvidia chips. S&P 500 futures are up 0.4% this morning. In Europe, the Stoxx 600 index ended the day neutral ahead of the Fed decision. In Asia this morning, Japan’s Nikkei 225 is up 1.4%, and South Korea’s Kospi is up 1.1%. Meanwhile, Hong Kong’s Hang Seng is down 0.2%, while China’s CSI 300 gained 0.3%. Oil prices fell by 0.8% on U.S. data: crude oil inventories dropped sharply, but diesel stocks rose, heightening concerns about U.S. demand.
Bonds. The yield on 10-year U.S. Treasuries rose slightly to 4.07%, indicating no surprises in the Fed’s decision.
KASE Index. Yesterday, the KASE Index recorded its biggest daily decline (-1.1%) since August 21. The closing price was the lowest in the past 15 days, making the upward consolidation scenario less likely. However, quotes remain above the ascending trend line, and the broader growth trend of the index remains intact.
Index stocks. All index stocks except KEGOC ended the day in negative territory. However, the rise in KEGOC, as well as the declines in Air Astana and Kazakhtelecom, were symbolic, with little change in their prices. The biggest drop came from Kazatomprom, which followed GDRs and uranium stocks lower. Overall, there was a slight cooling of the uranium sector after Monday’s sharp rally, but the growth scenario remains valid. BCC shares fell noticeably for the third day in a row — this time by 1.9%. Trading volumes yesterday were slightly higher than in previous days, and one large deal around 5,000 tenge took place, possibly indicating a partial return of buyers. Other stocks fell by less than 0.8%. Among them, Kaspi.kz shares were the most notable. They will likely continue to grow on KASE after yesterday’s +5% on Nasdaq. We also note the resumption of Kazakhstan’s oil exports through the Baku–Tbilisi–Ceyhan pipeline after a one-month pause due to oil contamination.
Currency. The dollar rose by 1.35 tenge yesterday, continuing the move toward 544 tenge. However, trading volumes were a third lower than on Tuesday.