JSE to contend with mixed Asian markets on Thursday ahead of Reserve Bank review

The JSE faces mixed Asian markets on Thursday morning, with sentiment still fragile amid volatility in cryptocurrency markets and ongoing concerns about rising inflation.

Cryptocurrencies have recently been experiencing selling pressure, with China also moving to tighten regulations, extending its ban on providing services to banks.

This appears to be spilling over to sentiment in tech stocks, said National Australia Bank analyst Tapas Strickland in a note, adding the market was also reacting to the release of US Federal Reserve minutes this week.

The minutes showed policymakers want to begin talking about tapering policy soon.

“The second and more important theme is whether the lift seen in US inflation will prove more durable, with the key implication being the possibility of the Fed needing to normalise policy sooner and perhaps more aggressively,” said Strickland.

Locally, consumer inflation, which the Reserve Bank monitors closely when deciding on interest rates, rose at its fastest pace in more than a year in April, but remained within the Bank’s 3%-6% target band, data showed on Wednesday.

Most analysts expect the monetary policy committee (MPC) to keep the repo rate at its record low 3.5% when it delivers its decision on Thursday, but its forward guidance will be closely watched.

In morning trade on Thursday, the Hang Seng was down 0.74%, while Japan’s Nikkei was flat.

Tencent, which gives direction to the JSE via the Naspers stable, was little changed.

Gold was 0.35% higher at $1,875.81/oz, while platinum had risen 0.65% to $1,295.23. Brent crude was 0.18% higher at $66.78 a barrel.

The rand was 0.15% firmer at R14.07/$, having slipped 0.65% on Wednesday.

Quantum Foods is due to release its results for the six months to end-March later, expecting headline earnings per share to fall at least a fifth. Local food producers have been grappling with rising input costs in 2021, as the price of grains such as soya and maize soar.

[email protected]