JSE could find support on Thursday from trade-war optimism
Optimism over the US-China trade war could help the JSE recover some of its recent losses on Thursday, but political uncertainty regarding the future of US President Donald Trump’s administration continues.
Trump said on Wednesday a trade deal with China could happen sooner than expected, boosting US equities, which have come under pressure recently amid impeachment concerns.
The White House has released a transcript of a telephone call between Trump and Ukrainian President Volodymyr Zelensky, which according to analysts lacks sufficient evidence that would prompt a criminal inquiry.
Markets are seemingly realising the chance of Trump’s removal is slim, said BK Asset Management FX director Kathy Lien in a note. However, Trump’s comments on a trade deal with China could be related to the impeachment proceedings, she said.
“Trump teased positive developments in trade many times before as distractions during political and financial market uncertainty and there’s a reasonable chance to expect the same,” said Lien.
Asian markets were subdued on Thursday, with the Shanghai Composite faring worst with a 0.73% fall as of 6.20am.
Chinese media giant Tencent, however, was up 0.75% in Hong Kong, boding well for Prosus and Naspers.
Gold was up 0.36% to $1,509.10/oz and platinum 0.38% to $931.11. Brent crude was flat at $62.39 a barrel.
The rand was steady at R14.9812/$.
International focus remains on the US, including the final estimate of US second-quarter economic growth.
Locally, producer inflation is due at 11.30am. Farm and factory gate inflation, as measured by the annual change in the producer price index, is expected to ease to 4.6% in August from 4.9% in July.
The corporate calendar is reasonably busy, with Capitec due to report its interim results to end-August later. The company said in a trading statement headline earnings per share (Heps) would increase by between 18% and 21%.
Blue Label Telecoms is later expected to report almost a five-fold fall in Heps for its year to end-May, due to it writing down the value of its stake in debt-laden mobile operator Cell C.
Net1 is expected to release its results after markets close on Thursday.
Source: businesslive.co.za