JSE set for good start as Tencent rallies amid bullish Asian markets
The JSE looks set to start the week off on a positive note with green screens from Asia and Tencent rallying, but it could be a choppy week on the markets after Chinese authorities distanced themselves from the talk of phasing out its strict Covid-19 policy.
The Hang Seng jumped 3.42%, the Nikkei in Japan 1.26% and the Shanghai composite in mainland China 0.46%. Year to date, the Hang Seng is down 28.19%, the Shanghai composite 15.07% and the Nikkei 6.01%.
Tencent, which influences the JSE via Naspers and Prosus, rose 3.60% on Monday morning, but has plunged 45.53% so far this year.
“Despite the denial, notions that China will pivot to living with Covid-19 in the new year are unlikely to be quashed given the very real toll that zero-Covid-19 is having on the economy,” National Australia Bank head of market economics Strickland said in a note.
“Folks don’t want to be late to the reopening party, and given how depressed local stocks have been trading this year, investors believe China’s zero-Covid-19 [policy] pivots are worth a roll of the dice,” SPI Asset Management managing partner Stephen Innes said in a note.
Stocks in Hong Kong surged. The market in Japan was helped by gains on Wall Street on Friday, solid earnings reports on Monday and upbeat corporate outlooks lifting sentiment.
In local market news, the JSE all share index rallied 4.93% — the biggest one-day jump since March 25 2020 — to 69,305 points on Friday. Industrial metals led the gains as investors bet that the Chinese economy opening up would boost economic growth and demand for these materials.
US markets closed higher on Friday as the S&P 500 gained 1.36%, the Nasdaq 1.28% and the Dow Jones 1.26%. The Nasdaq has lost more than one-third (33.84%) so far this year, the S&P 500 over one-fifth (21.39%) and the Dow Jones 11.43%.
The rand strengthened 0.15% against the dollar, trading at R17.94. The rand has depreciated 11.02% against the greenback so far this year.
It was a mixed bag from commodities as the price of Brent crude increased 3.12% to $97.49 a barrel, while platinum and gold decreased by 0.16% and 0.45%, respectively, to $951.00 and $1,6734.11/oz.
In corporate news, Redefine Properties will release their 2022 results.
The only economic data expected on Monday is the foreign exchange reserves numbers for October from the SA Reserve Bank.
Source: businesslive.co.za