JSE faces mixed Asian markets as traders wait for Fed speech

The JSE is facing mixed Asian markets on Thursday as Japan’s Nikkei jumped while the Chinese markets were slightly down.

The Nikkei gained 2.04% as Japan’s latest GDP figures beat forecasts and gains on Wall Street’s three major markets — the Dow Jones, S&P 500 and the Nasdaq — boosted markets.

Hong Kong’s Hang Seng dropped 0.39% as it fell for the sixth straight session. Investors remain wary of the possibility of more interest rate hikes from the US Federal Reserve after recent positive economic data from the world’s largest economy suggested it might have room to tighten monetary policy. Traders will search for clues in Federal Reserve chair Jerome Powell’s speech later on Thursday.

The Shanghai composite in mainland China declined 0.14%, weighed down by the latest trade data in the world’s second-largest economy and Covid-19 lockdowns in several cities, including industrial hubs. The capital, Beijing, reported its highest number of new coronavirus cases on Tuesday since mid-June.

“Chinese exports fell relative to the previous month’s print and expectations, as slowing global demand for Chinese goods weighed,” Sasfin wealth fixed income trader Alvin Chawasema said in a note on Thursday. “Markets have been prone to chasing every bit of noise lately, as if each release was seminal with lasting value.”

Tencent, which influences the JSE via Naspers, lost another 2.37%.

The JSE closed lower on Wednesday, underscoring the uncertainty that has gripped stock markets in recent weeks. The all share shed 1.22% to 66,715.83 points. Sasol fell 6.56% to R312, the most since early July, because of lower oil prices. Discovery plunged 10% to R110.11 after the company opted to maintain its no-dividend policy for ordinary shareholders despite earnings topping pre-pandemic levels. The PSG Group plummeted 74.39% to R22.50 after the unbundling of PSG Konsult, Curro, Kaap Agri and Stadio.

Gold and platinum dropped, while Brent crude was in the green. Gold fell 0.15% to $1,714.78/oz, platinum declined by 0.35% to $863.44, and Brent crude was up 0.98% to $88.61 a barrel.

The dollar gained 0.19% against the rand, trading at R17.30/$.

Insurer Sanlam will release its interim results on Thursday. It said last week it plans to raise its premiums in its second half as its underwriting margins come under pressure from accelerating inflation, a factor driving claims payouts higher, with vehicle-parts prices rising. Rampant global inflation added to the effect of devastating floods in KwaZulu-Natal in April 2022, making the first half of 2022 one of the most challenging underwriting periods in Santam’s history.

In terms of economic releases, the latest FNB/BER Consumer Confidence Index (CCI), the SA Reserve Bank’s current account data and manufacturing data for July by Stats SA will be published on Thursday.

Consumer confidence is expected to drop further to a reading of -35.

The Bank will on Thursday publish current account data for the first quarter of 2022. The current account recorded a surplus of R120bn in the fourth quarter of 2021, falling from a surplus of R216bn in the third quarter.

Manufacturing data is expected to bounce back to 4.7% year on year.

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Source: businesslive.co.za