JSE could open mixed on Tuesday as post-G20 rally fizzles
The JSE could take its cue from Asian markets and open mixed on Tuesday as the post-G20 rally proves short-lived.
US stocks closed at fresh record highs overnight after President Donald Trump and Chinese leader Xi Jinping agreed to a truce in their trade spat while at the G20 summit in Japan. Technology stocks led the gains after US firms were given permission to continue doing business with Huawei.
But following Monday’s gains, Asian markets were mixed on Tuesday morning as weak Chinese manufacturing data raised concerns about economic growth in the world’s second-largest economy and trade worries lingered.
“No-one seems to be under any illusion that the agreement between presidents Trump and Xi in Osaka greatly improves the prospect of a comprehensive trade deal being struck any time soon, but the mere fact that the two sides have agreed to restart talks in earnest has provided the pretext for the moves in equities and bond markets,” said Ray Attrill, foreign exchange strategist at National Australia Bank.
“Yet rather than this being a greenlight for a resumption of US dollar weakness, the foreign exchange market has instead gone with the relative moves in bond yields — for today at least.”
US bond yields rose while their eurozone benchmark equivalents fell by about the same amount, Attrill said.
Hong Kong’s Hang Seng index was 1.4% up on Tuesday after missing out on Monday’s rally due to a public holiday in the city. Japan’s Nikkei 225 was 0.2% up while the Shanghai Composite was flat and Korea’s Kospi lost 0.3%. Singapore’s main benchmark lost 0.5% while Australia’s gained 0.3%.
Chinese internet and gaming giant Tencent, which influences the JSE via major shareholder Naspers, was 2.8% up. Naspers rose by a similar amount on Monday.
JSE-heavyweight BHP Group added 0.9% in Australia.
No major company results or data releases are expected in SA on Tuesday.
Elsewhere, the EU is due to release manufacturing data and the US will publish vehicle sales figures.
The rand was flat on Tuesday morning at R14.14/$, R17.87/£ and R15.96/€.
Source: businesslive.co.za
