JSE may benefit from higher Asian markets amid US election developments

The JSE faces much higher Asian markets on Thursday morning, and a surging Tencent, as focus remains squarely on US election uncertainty.

Republicans have retained control of the Senate, while Democrat candidate Joe Biden seems poised to secure the White House, though there is still the prospect of legal battles and vote recounts.

“The contest is not over, and President [Donald] Trump will not go down without a fight, but financial markets are confident to price in a Biden presidency along with a Republican-controlled Senate,” Oanda senior market analyst Edward Moya said in a note.

This outcome has decreased the chance of additional regulation, something that was benefiting tech stocks, said Axi chief global markets strategist Stephen Innes in a note.

“It is much more comfortable to rationalise tech higher as investors turn sweet in the idea of a divided government,” he said.

In morning trade, the Hang Seng had jumped 2.78% and Japan’s Nikkei was up 1.43%.

Chinese tech giant Tencent, which often influences the JSE via its largest single shareholder Naspers, had surged 5.7%.

Gold was up 0.22% to $1,907.39/oz while platinum rose 0.57% to $873.52. Brent crude was 1.5% lower at $40.55 a barrel.

The rand was 0.17% higher at R15.86/$.

The corporate calendar is slightly busy on Thursday, with paper group Sappi expected to report its results for the year to end-September later.

Fashion group TFG is due to report its interim results to end-September, which are expected to show a sharp fall in profits as Covid-19 hit store sales.

ArcelorMittal SA is due to release a third-quarter trading update as well, saying recently it had seen some improved demand as construction projects resume.

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