JSE set to open week to positive Asian markets

The JSE looks set for a good start to the week with green screens from Japan and Hong Kong to mainland China.

The Hang Seng in Hong Kong is leading the pack with an increase of 2.69% while the Shanghai composite added 0.82%. Both markets are closed on Monday because of the Mid-Autumn Festival public holidays, which will see investors digest mooncakes instead of markets.

Japan’s Nikkei was up 1.02% as technology stocks gained the most amid improved risk sentiment among investors globally.

Travel stocks also improved as local media reported that the government is considering allowing individual travel and dropping the restrictions for groups to visit the Land of the Rising Sun.

Meanwhile, investors are awaiting the latest US inflation figures on Tuesday as they search for clues about a possible interest rate hike. A 75 basis-point increase is expected when the US Federal Reserve meets on September 20-21 after Fed chair Jerome Powell on Thursday said the world’s largest economy is “strongly committed” to fighting inflation, but hopes to do so without the “very high social costs” of previous struggles to tame rapid price increases.

Tencent, which influences the JSE via Naspers, rose 1.72%.

The JSE had its best day in a month on Friday after tracking markets worldwide that firmed after the European Central Bank (ECB) raised interest rates 75 basis points. By the market close, the JSE all share index had gained 2.15% to 68,708 points, its biggest one-day gain since August 11.

The dollar was flat against the rand, trading at $17.30.

“Local inflation [figures] will be released next week making Tuesday’s US inflation a key focus for the markets’ short-term direction. Expect local yields to open where they left off on Friday with direction to be influenced by currency moves,” Sasfin Wealth fixed income trader Alvin Chawasema said in a note on Monday.

Brent crude, gold and platinum were all down. Brent fell 1.52% to $91.43 a barrel. Gold was 0.08% lower at $1,714.61/oz while platinum decelerated 0.46% to $876.91.

The corporate calendar for Monday is bare. In terms of economic data, the latest edition of the Absa manufacturing survey, compiled by the Bureau for Economic Research (BER) at Stellenbosch University, will be released on Monday. This quarterly report, which presents current trends and valuable perspective on the outlook for the sector, is released before official indicators in the sector.

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