JSE set for a mixed start on Tuesday

The JSE is likely to open mixed on Tuesday as risk appetite cools amid brewing global trade tensions and following relatively weak results from US banks.

Singapore-based OCBC Bank said in a note on Tuesday that traders could shift into risk-off mode on the day after earnings from Goldman Sachs and Citigroup prompted the S&P 500 index to slip from a six-month high overnight.

Goldman Sachs reported lower quarterly revenues in most key business units and said first-quarter profits dropped 20%.

Meanwhile, the US, which is reportedly nearing a trade deal with China, is shifting its attention to trade negotiations with Japan and Europe. Some analysts believe the rise in trade protectionism could hamper the global economy.

Hong Kong’s Hang Seng index was 0.6% up at the lunch break on Tuesday, while Japan’s Nikkei 225 was 0.3% higher. After declining on Monday, the Shanghai Composite was 1.3% up. Australia’s main index climbed 0.4%.

Signalling that Naspers could bounce back on Tuesday, Tencent’s shares were 1.1% up in Hong Kong. Naspers dragged the JSE all share index 0.3% lower on Monday.

Meanwhile, BHP Group was 0.2% down in Australia. 

The rand was marginally weaker on Tuesday morning, trading at R14.06/$, R18.41/£, and R15.90/€.

“The rand has started Tuesday off slightly weaker as major currencies rebound somewhat following a long stretch of subdued and range-bound activity,” said Bianca Botes, corporate treasury manager at Peregrine Treasury Solutions.

“The markets are looking towards China and Europe with high hopes that economic data will indicate that the worst is over for the global economy,” Botes said.

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