JSE faces mixed Asian markets as inflation concerns persist

The JSE will open to mixed markets from Asia on Wednesday as concern about inflation persists despite Shanghai edging towards the end of its lockdown and Chinese Vice-Premier Liu He saying he supports the development of the tech sector after unprecedented crackdowns in 2020 and 2021.

Positive retail sales and industrial production data from the US helped the market on Tuesday, but this was offset by Federal Reserve chair Jerome Powell saying the US central bank would raise interest rates if it is necessary to nip surging inflation in the bud.

In morning trade, Japan’s Nikkei was up 0.68%, the Shanghai Composite down 0.13% and the Hang Seng in the red by 0.11%.

Tencent, which can influence the JSE via the Naspers stable, slid back 2.23%.

Meanwhile, there is growing uncertainty about the outlook for the global economy in 2022 as the war in Ukraine continues and high inflation persists.

Stats SA will release inflation and retail figures on Wednesday. Trading Economics expects monthly inflation to slow from 1% in March to 0.9% in April, while annual inflation to accelerate from 5.9% to 6%. Core inflation is forecasted to quicken from 3.8% to 3.9% in April. Retail figures are expected to show an uptick of 1.3% for the month of March and 1% year on year.

The big local focus this week remains on the Reserve Bank, which is expected to announce a 50 basis point interest rate hike on Thursday, after its three-day monetary policy committee meeting.

The rand broke below R16 to the dollar on Tuesday, while the JSE touched 70,000 points in intraday trading for the first time in a week on the hope that China will ease its Covid-19 curbs.

The rand gained 0.13% on Wednesday morning and was R15.93 against the dollar.

Gold is down at $1,809.15/oz while platinum is up 0.03% to $956. Brent crude increased by 0.20% to $112.88 a barrel.

In local company news, Nedbank, SA’s fourth-largest bank by assets; Truworths, one of SA’s biggest fashion retailers; Italtile, SA’s biggest retailer and manufacturer of tiles; Merafe Resources, the junior empowerment partner in a chrome joint venture with Glencore; and OneLogix, logistics and supply chain group, will release results on Wednesday.

[email protected]

Source: businesslive.co.za