JSE set for mixed start on Monday ahead of US-China trade talks

SA stocks could open mixed on Monday, in line with Asian markets, ahead of an expected cut in US interest rates and face-to-face trade talks between the world’s two largest economies.

Federal Reserve chair Jerome Powell is widely expected to cut interest rates by 25 basis points on Wednesday amid a weakening outlook for the global economy and trade tensions.

The Fed will likely respond to “the soft international climate, which poses downside growth risks and potentially heightened disinflationary pressures”, analysts at ANZ Banking Group said in a note.

Meanwhile, representatives from the US are due to hold in-person trade talks in China this week. A full resolution to the protracted trade dispute between the two nations is not expected to be imminent.

Asian markets were mixed on Monday, with Hong Kong’s Hang Seng Index losing 1.2% amid widespread protests in the Chinese special administrative region.

The Shanghai Composite was 0.1% down and Japan’s Nikkei 225 lost 0.4%. Korea’s Kospi fell 1.6%, but Australia’s main benchmark added 0.5%.

WeChat-owner Tencent, which influences the direction of the JSE through major shareholder Naspers, was flat in Hong Kong, as was JSE heavyweight BHP Group in Australia.

JSE-listed landlord Hammerson is due to publish half-year results on Monday.

The Reserve Bank will release monthly data and a reading of international reserves and foreign currency liquidity. 

The rand remained on the back foot on Monday morning following negative comments about SA’s fiscal position from ratings agencies last week.

The local currency was trading at R14.30/$, R17.68/£ and R15.91/€.

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