Market overview

Ukrainian Agri Stocks Slide while Global Equities Hit Fresh Records

Shares of Ukrainian agricultural companies traded on overseas markets weakened on concerns over the disruption to maritime exports. MHP (MHPC) stock fell 7.1% to USD 7.6 from USD 8.2, while Astarta (AST) and IMC (IMC) shares each lost about 2%. Ukraine is among the world’s largest producers of wheat, corn and sunflower seeds and around 90% of its exports of such crops go through the Black Sea. Farming accounts for nearly 60% of Ukraine’s export revenues, and the blockade adds pressure to the fragile wartime economy. While global benchmark Chicago grain prices hit their highest in more than a year in July in response to Black Sea disruption and anxiety about shortages globally, domestic Ukrainian prices have slumped as local supplies have accumulated.

The hryvnia continued to trade below the 45-per-dollar level on the interbank market, with the official exchange rate set at 44.7 per dollar on Friday. The NBU continued to intervene heavily to balance foreign-currency demand, selling USD 1.1 billion over the week. Its total interventions since the start of the year have reached about USD 30 bn.

Meanwhile, major global equity indexes returned to record highs, with the S&P 500 up 12.9% since the start of the year. Technology stocks, particularly chipmakers, provided the biggest boost. Micron shares have tripled this year, while Intel has surged 177% and AMD has gained 140%.

Among the S&P 500’s laggards, IBM shares have fallen 21% this year, while Tesla is down 24%.

The base-case outlook through year-end remains moderately bullish, with the S&P 500 potentially reaching 8,000–8,200 points, implying another 3%–5% gain. The path is unlikely to be smooth, however.

After the sharp rally, investors are already paying a high price for future earnings, particularly in the technology sector. Even a modest earnings disappointment from the largest companies could therefore trigger a correction.