The JSE looks set to be buoyed by the green screens from Asia as tech stocks rallied in Hong Kong, including Tencent up by almost one-tenth, after a positive meeting between US President Joe Biden and Chinese President Xi Jinping in Indonesia on Monday.
The Hang Seng in Hong Kong rose by 3.62%, the Shanghai composite in mainland China 1.27% and the Nikkei in Japan 0.23%, respectively. Year to date, the Hang Seng is down 28.09%, the Shanghai composite 14.03% and the Nikkei 4.36%.
Tencent, which influences the JSE via Naspers and Prosus jumped 9.59%, but remains down 37.06% in 2022.
The Hang Seng and Shanghai composite were upbeat after the meeting between Biden and Xi on the sidelines of the G20 summit where they called for reduced tensions between the world’s largest economies.
“The two talked about Taiwan, where Biden noted that the US position on Taiwan and the ‘one China — two systems’ stance had not changed. That was helpful. For his part, Xi openly spoke out against the use of nuclear weapons by Russia. That was also helpful,” Asia-Pacific head of research Robert Carnell and senior Philippines economist Nicholas Mapa at the ING Group said in a note.
“Both countries have also agreed to resume co-operation on issues including climate change and food security and importantly too they jointly rebuked the Kremlin for loose talk of nuclear war over Ukraine,” National Australia Bank currency strategist Rodrigo Catril said in a note.
Traders in China also shrugged off the disappointing economic data.
The market in Japan continues to consider the upbeat inflation data from the US despite new data showing the Japanese contracted unexpectedly in the third quarter because of inflationary pressures worldwide and a weaker yen weighing on import costs.
The JSE closed weaker on Monday while US and European markets were generally firmer as investors considered comments on US interest rates from officials at the Federal Reserve after weaker-than-expected inflation data from the world’s largest economy last week.
Fed governor Christopher Waller cautioned on Monday that the central bank still had a long way to go before it stops raising interest rates.
“Last week a number of Fed officials spoke after the CPI, acknowledging the better-than-expected result but warned that the tighter policy outlook hadn’t changed,” Bank of New Zealand senior market strategist Jason Wong said in a note. “It looks like we’ll get a rinse and repeat from more Fed officials this week, with two more officials already adding to this theme.”
The JSE all share eased 0.22% to 72,822.47 points and the top 40 slipped 0.25%, with food producers down 1.74%, resources 0.64% and industrial metals 0.6%.
Markets ended lower in the US on Monday as the Nasdaq dipped 1.12%, S&P 500 0.89% and the Dow Jones 0.63%. The Nasdaq has lost 29.28% of its value in 2022, the S&P 500 17.50% and the Dow Jones 8.33%.
The rand strengthened by 0.19% against the dollar, trading at R17.27. The rand has depreciated by 8.26% against the greenback this year.
Commodity prices were slightly higher as Brent crude advanced 0.38% to $92.82 a barrel, while gold and platinum were flat at $1,770.76/oz and $1,017.40, respectively.
In local corporate news, personal storage provider Stor-Age Property and small-cap steel products group Argent Industrial will publish their interim results on Tuesday, and WeBuyCars-owner and taxi financier Transaction Capital its annual results.