The JSE will likely open mixed on Friday, in line with Asian markets, amid concerns about the state of the global economy and trade tensions between the US and China.
Following better-than-expected US retail sales data, the S&P 500 index added 0.3% overnight. However, the technology-heavy Nasdaq Composite retreated slightly and US Treasury yields continued to fall.
Investors are concerned about a looming economic recession, particularly after US yield curves inverted. An inverted yield curve – where short-term bonds yield less than longer-dated ones – implies that investors expect lower rates in future amid a possible recession.
Meanwhile, markets are keeping a close eye on trade talks between the US and China.
China has threatened to retaliate to additional tariffs on its exports, although President Donald Trump said on Thursday discussions had been “productive”.
Asian markets were mixed on Friday. Hong Kong’s Hang Seng index rose 0.8% and the Shanghai Composite 0.7%. Japan’s Nikkei 225 was slightly up although Korea’s Kospi fell 0.7% and Australia’s main benchmark was flat.
WeChat-owner Tencent, which influences the direction of the JSE via major shareholder Naspers, declined 0.9% in Hong Kong.
JSE-heavyweight BHP Group was flat in Australia.
Resilient Reit is due to publish annual results on Friday. The landlord said in June its distribution to shareholders was likely to be at the lower end of its previous guidance.
Among other factors, the company said distributable earnings had been weighed down by increased expenses for repairs and maintenance of electrical items because of power cuts.
The rand, which has lost ground along with other emerging-market currencies in recent weeks, was about 0.4% firmer against major currencies on Friday morning.
The local currency, which has also been hit by concerns about a looming sovereign debt downgrade for SA, was trading at R15.23/$, R18.42/£ and R16.90/€.