JSE faces subdued trade on Tuesday amid Chinese holiday

The closure of Chinese markets for the day could suppress activity on the JSE a little on Tuesday, with gold miners looking likely to be under pressure as the price of the precious metal slips to an eight-week low.

Solid US economic data is reducing expectations of US Federal Reserve interest rate cuts, which takes the edge off gold, which is seen as a hedge against inflation and loose monetary policy.

“A less accommodative Fed implies a stronger dollar and higher US yields which are the absolute worst bedfellows for gold markets,” AxiTrader market analyst Stephen Innes said in a note.

Tuesday represents the start of the final quarter of 2019, with gold miners performing well in adding 12.12%, the fourth-consecutive quarter of gains. The JSE gave back 5.81% during the quarter.

At 6.20am on Tuesday gold had fallen 0.48% to $1,465.16/oz and platinum 0.11% to $881.39. Brent crude was 0.61% higher at $59.74 a barrel.

The rand was flat at R15.1485/$.

Hong Kong and Shanghai are closed for the day, while Japan’s Nikkei fell 0.56%.

Mass protests are scheduled in Hong Kong on Tuesday to coincide with the 70th anniversary of the forming of the People’s Republic of China.

Local focus is on business confidence, with the Absa manufacturing purchasing managers’ index for September due at 11.30am. Analysts expect the index to remain below 50 points, which indicates contraction.

After jumping to a more than three-year high of 52.1 index points in July, the PMI declined to 45.7 index points in August, much worse than expected. The sector accounts for about 13% of GDP.

New vehicle sales for September are due later, having shown consistent declines through the course of 2019.

The local corporate calendar is light, though a number of companies had released results after markets closed on Monday.

Rex Trueform, the owner of the Queenspark fashion brand, reported that headline earnings per share (heps) jumped 17.5% to 73.1c in its year to end-June.

Putprop, which operates in the transport and real estate sectors, said heps rose 20.3% to 71.64c in its year ended-June.

African and Overseas Enteprises reported a 12.2% fall in heps for its year to end-June, to 44.1c.

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