JSE faces mixed Asian markets on Monday as investors digest China rate cut
The JSE faces a mixed Asian session on Monday morning, with investors digesting a surprise interest rate cut by China and weak economic data from the country.
The People’s Bank of China lowered the rate on its one-year loans by 10 basis points to 2.75% on Monday, with the country still trying to bounce back from Covid-19 lockdowns this year and from troubles in its real estate market, in which many developers are struggling with debt.
Economic data from the world’s second-largest economy also disappointed, with industrial production growing 3.8% in July, less than the 4.6% expected by the market.
Sentiment was given a lift last week by some positive US economic data, including inflation easing more than expected in July and a positive consumer sentiment report.
This has helped ease concerns about further interest rate hikes. Much attention this week will be on the minutes of the US Federal Reserve’s meeting. US retail sales numbers for July are also due, while investors will be watching earnings reports from major retailers such as Target, Home Depot and Walmart.
In morning trade on Monday the Shanghai composite was flat and the hang seng was down 0.28%, while Japan’s nikkei gained 1.11%.
Tencent, influential to the local bourse due to Naspers, fell 1.12%.
Gold was down 0.3% to $1,797.60/oz, while brent crude dipped slightly to $97.70.
Coal miner Thungela is due to release its results for the six months to end-June later, flagging in a recent trading update it would report an almost forty-fold rise in earnings as it cashes in on surging prices in the wake of Russia’s invasion of Ukraine.
Absa, SA’s fourth-biggest bank by market value, is due to release interim results later. It has flagged profit growth of at least a quarter for its half-year to end-June, having indicated that easing Covid-19 restrictions proved supportive for loan growth.
The economic calendar is bare, with only retail sales for June on Wednesday expected to garner much attention.
With Bloomberg
Source: businesslive.co.za