Trade tensions likely to weigh on the JSE again on Tuesday

The JSE will probably get off to another subdued start on Tuesday as the ongoing trade dispute between the world’s two largest economies continues to curb investors’ appetite for risk.

The all-share index lost 1% on Monday amid light trading volumes, while the US’s technology-heavy Nasdaq Composite index fell 1.5% overnight.

Stock markets have suffered after US President Donald Trump signed an executive order to blacklist Huawei from the US market.

Google then suspended technology co-operation with the telecoms company, further escalating tension between the US and China.

Analysts at OCBC Bank in Singapore said while stocks would likely drift lower on Tuesday, tensions between the US and China “may ease slightly today” after American officials said the country would grant a 90-day reprieve on the ban on technology transfers.

Hong Kong’s Hang Seng Index was 0.2% up on Tuesday and China’s Shanghai Composite added 1.5%. Korea’s Kospi was 1% higher, while Japan’s Nikkei 225 and Australia’s main benchmark were both flat.

Chinese technology and gaming giant Tencent, which has been on a losing streak since mid-April, rebounded 1.3% on Tuesday morning. That suggests a recovery for major shareholder and JSE-heavyweight Naspers.

BHP Group was 0.5% lower in Australia.

Meanwhile, Coronation Fund Managers is scheduled to report interim results on Tuesday.

Coronation has warned that its headline earnings per share in the half year to end-March fell between 20% and 30%. Total assets under management remained flat at R586bn.

Rhodes Food Group is also expected to publish results for the six months to end-March.

The group said recently turnover in the five months to end-February increased by 8%.

No major data releases are expected in SA on Tuesday. Elsewhere, traders will keep an eye on consumer confidence numbers from the EU and home sales in the US.

The rand was flat on Tuesday morning at R14.39/$, R18.31/£ and R16.06/€.

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