JSE looks set for a weak Thursday amid Hong Kong drama

The JSE may take its lead from a sea of red on global markets on Thursday morning, with risk assets out of favour due to the threat of rising political tension between the US and China.

The US Congress on Wednesday voted in favour of a bill that would provide an annual review of Hong Kong’s trade status, and also provides for sanctions against officials who abuse human rights.

This has created concern that China will react by refusing to co-operate on a new partial deal, with US President Donald Trump expected to endorse the bill.

There is little doubt that China-US trade headline fatigue has started to set in in the past week or so, but markets are nevertheless showing more sensitivity to news stories that cast doubts on the likelihood of a near-term deal, in whatever form,” said National Australia Bank analyst Ray Attrill in a note.

Asian markets were sharply lower, with Hong Kong’s Hang Seng leading the losses, down 1.61%. WeChat owner Tencent, which influences the JSE via Naspers, had fallen 1.8%.

Gold was flat at $1,470.47/oz while platinum was down 0.29% to $915.38. Brent crude was 0.42% lower at $62.20 a barrel.

The rand was 0.12% firmer at R14.766/$.

Local focus on Thursday is on the Reserve Bank, which is widely expected to keep interest rates unchanged during its final policy announcement of 2019.

The domestic corporate calendar is fairly busy, with Life Healthcare expected to report later that revenue grew as much as 10.3% in its year to end-September.

Hosken Consolidated Investments is expected to report an up to 22.2% decline in headline earnings per share (heps) for the six months to end-September, due to write-downs in some of its mineral exploration interests.

Niveus is expected to report an up to 94% decrease in heps for its six months to end-September, having been boosted by disposals in the prior comparative period.

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Source: businesslive.co.za