JSE could get a boost from Tencent and BHP on Thursday morning
The JSE’s all-share index could get a boost from China’s Tencent and miner BHP Group on Thursday as markets focus on upcoming high-stakes trade talks between the US and China.
While US stocks traded mixed overnight, Asian stocks were mostly higher on Thursday.
“Hopes of a positive outcome from US-China trade talks at the G20 [Group of 20] summit is driving markets stronger, with the US treasury secretary alluding to progress during a statement ahead of the summit,” said Bianca Botes, treasury partner at Peregrine Treasury Solutions.
US treasury secretary Steven Mnuchin said the US is willing to suspend the next round of tariffs on Chinese imports.
This after US President Donald Trump said that “plan B for China is to take in billions and billions of dollars a month and we’ll do less and less business with them”. Trump and his Chinese counterpart, Xi Jinping, are due to meet at the G20 summit in Japan over the weekend.
Adding to the uncertainty, Trump said separately that the US Federal Reserve would be better off with the European Central Bank’s Mario Draghi at the helm, after the Fed did not cut interest rates in June.
Nevertheless, Asian stocks pushed higher on Thursday, with Hong Kong’s Hang Seng Index up 1.1%, the Shanghai Composite rising 1%, Japan’s Nikkei 225 adding 0.9% and Korea’s Kospi up 0.8%. Equities in Australia were marginally higher.
Chinese internet and gaming giant Tencent rose 1.3% in Hong Kong, suggesting a positive start for major shareholder Naspers, which accounts for about a fifth of the JSE.
JSE heavyweight BHP Group was 1.4% higher in Australia.
This comes after a fall in the precious metals sector “as investors took a breather after the recent gains”, analysts at ANZ Banking Group in Australia said, citing dimmer prospects of large rate cuts by the Fed.
“Easing trade tension also did not help safe-haven buying in gold,” ANZ said, citing Mnuchin’s comments.
JSE-listed Argent Industrial is due to report financial results for the year to end-March on Thursday.
The company has said headline earnings per share rose between 16.6% and 36.6% in the year.
Stats SA is due to publish quarterly financial data, trade statistics, the producer price index (PPI) for May, and construction materials price figures.
The SA Reserve Bank will publish a quarterly bulletin.
The rand was flat on Thursday morning at R14.23/$, R18.05/£ and R16.16/€.
“If the bets continue for a positive conclusion [to the US-China trade spat] the rand can strengthen as high as R14.08/$, but a negative outcome would see the rand decline to R14.50 quite easily,” said Botes.
Source: businesslive.co.za
