JSE in for another cautious start on Tuesday ahead of rate calls and trade talks

The JSE could open mixed on Tuesday, with the all-share index getting a small boost from WeChat owner Tencent and miner BHP Group, as markets await news on China’s in-person trade talks with the US and key interest rate decisions.

Representatives from the US are in Shanghai this week as the world’s two largest economies attempt to resolve a protracted trade dispute that has weighed on economic growth forecasts. Meanwhile, the US Federal Reserve is widely expected to cut interest rates by 25 basis points on Wednesday.

US stocks traded mixed overnight, though Asian markets were slightly higher on Tuesday morning.

Hong Kong’s Hang Seng Index was 0.3% up amid widespread protests in the city. The Shanghai Composite added 0.7%.

Japan’s Nikkei 225 gained 0.4% as the country’s central bank left interest rates unchanged but said it would take action if necessary. Korea’s Kospi rose 0.6% and Australia’s main benchmark 0.3%.

Chinese internet and gaming giant Tencent, which influences the JSE’s main indices via major shareholder Naspers, rose 0.8% in Hong Kong.

BHP Group added 0.7% in Australia after commodity prices increased on Monday.

The JSE is due to publish half-year results on Tuesday afternoon. The exchange has warned that its headline earnings per share fell by 25%-35% amid lower trading volumes. In the equities market, net foreign sales and “muted local investor activity” resulted in lower fee-based revenue for the bourse.

Meanwhile, Statistics SA will release a labour force survey for the second quarter on Tuesday.

“After contracting 1.4% quarter on quarter in the first quarter, we anticipate that employment likely rebounded in the second quarter,” said Mamello Matikinca-Ngwenya, FNB’s chief economist.

“A recovery in general economic activity and a transitory rise in hiring in the community and social services sector in the run-up to the national elections are among the main factors informing this expectation.”

The SA Reserve Bank will publish central government operations and debt readings.

Elsewhere, the US is due to publish personal income and spending data, as well as consumer confidence readings and pending home sales, while Europe will publish economic confidence data. Germany will release consumer inflation numbers and France second-quarter economic growth statistics.

The rand regained some lost ground on Tuesday morning, with the local currency trading at R14.15/$, R17.17/£ and R15.77/€.

[email protected]

Source: businesslive.co.za