JSE set for a mixed start on Wednesday as news flow resumes

SA’s main bourse will likely get off to a mixed start on Wednesday as global sentiment softens after the IMF cut its growth outlook for the world economy.

The JSE has been treading water so far this week because of a lack of market-moving news, but Wednesday will be a busier day.

On Tuesday afternoon, the IMF lowered its global growth forecast for 2019 to 3.3% from 3.5%. It also downgraded SA’s 2019 growth forecast to 1.2% from 1.4% previously.

The Shanghai Composite and Hong Kong’s Hang Seng index were both 0.4% lower on Wednesday, while Japan’s Nikkei 225 index was 0.7% down. 

Stock markets were slightly higher in Korea, Singapore and Australia.

Naspers’ main asset, Chinese technology giant Tencent, was 1% up in Hong Kong. Tencent’s shares have rallied 10% since March 26.

At the same time, JSE-heavyweight BHP Group was 0.7% down in Australia.

Shares in Richemont, the top-40 index’s fifth largest constituent, were on a downward trend on Tuesday after Credit Suisse downgraded the company’s equity to “underperform” from “neutral”, and lowered its price target to 64 Swiss francs ($63.99) from Sf73.

Richemont’s shares closed 3.9% down on the JSE at R97.87, the worst level in about two months. Even after Tuesday’s declines, the stock is still overvalued, according to Credit Suisse.