JSE faces mixed Asian markets after Wall Street inches higher

The JSE will open to mixed screens from Asia on Thursday morning after Wall Street’s three major indicators inched higher after a big sell-off over the past two days.

US inflation data coming in hotter than expected triggered the sell-off. While US headline inflation slowed to 8.3% year on year in August from 8.5% in July, core inflation — which excludes volatile energy and food and is the Federal Reserve’s preferred measure of prices — accelerated to 6.3% from 5.9%.

The Hang Seng in Hong Kong was up 0.46% and Japan’s Nikkei 0.18%, but the Shanghai Composite in mainland China dropped 1.01%.

The Hang Seng and Nikkei tracked Wall Street’s gains, but the Shanghai Composite dipped as the People’s Bank of China stuck to its medium-term lending facility rate of 2.75%.

The divergent monetary policy stance between China and most other countries, including the US, leaves the world’s largest economy with less room to manoeuvre as it sticks to its zero-Covid policy, which has dampened the local economy.

The full lockdown of the Chinese city of Chengdu is set to be lifted on Thursday.

“While the easing of restrictions in Chengdu and Shenzhen are positive, there remains the ever-present risk of future growth-damaging lockdowns with the authorities appearing set on keeping Covid contained until at least after the Party Congress next month,” National Australia Bank currency strategist Rodrigo Catril said in a note on Thursday. 

Tencent, which influences the JSE via Naspers, gained 0.13%. In the local market, heavyweight Naspers closed 1% higher on Tuesday at R2,470 on the JSE.

In local markets, the JSE ended weaker in a volatile session on Wednesday, adding to Tuesday’s heavy losses, with the all share index falling a further 0.45% to close at 67,964.02 points.

Gold, platinum and Brent crude were all down 0.28%, 0.54% and 0.27%, respectively. Gold was trading at $1,691.02/oz, platinum at $900.89% and Brent crude at $93.85 a barrel.

The dollar was flat against the rand at R17.49.

The highlights of Thursday’s corporate calendar include FirstRand, Metair, Airports Company SA (Acsa) and SA Corporate Real Estate.

On Thursday, the financial services group FirstRand will release its 2022 results. The company advised shareholders last week that it expects per share earnings to increase by 20%-25% to between 572.2c and 596.1c.

The interim results of automotive components manufacturer and battery maker Metair will also be published, and it expects its headline earnings per share, a widely used measure of profit that strips out impairments and one-off items, to drop by 71%-76% to 40c-50c.

Acsa will share its results for the year to end-March on Thursday, while the interim results of SA Corporate Real Estate, a diversified real estate investment trust, are expected.

Stats SA is releasing a series of economic data, starting with the number of civil cases for debt at 9am, wholesale trade figures at 10am and motor trade sales data at 11.30am before finishing with the selected building statistics of the private sector as reported by local government institutions at 1pm.

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Source: businesslive.co.za