US-China trade optimism may boost JSE on Monday

The JSE may take its lead from firmer Asian markets on Monday morning, with the US-China trade war yet again dominating the headlines.

After some concerning reports on Thursday suggesting the US and China were struggling to complete a first-phase deal to halt their trade war, early on Friday White House advisor Larry Kudlow said that the phase-one trade deal was “coming down to the short strokes”.

The “mood music is pretty good”, National Australia Bank analyst Rodrigo Catril said in a note.

The hot-and-cold messages from the trade tensions remains the dominant theme in markets, with underwhelming US data releases on Friday only playing a secondary role, Catril said.

On Monday morning Asian markets were firmly up, with the Hong Kong Hang Seng up 1.11%, while Japan’s Nikkei had added 0.7% and the Shanghai composite 0.58%.

Gold was down 0.12% to $1,466.10 an ounce while platinum was flat at $890 an ounce. Brent crude was 0.22% lower at $63.30 a barrel.

The rand was 0.15% firmer at R14.694 a dollar.

Tencent was up 2% in Hong Kong, boding well for Prosus and Naspers.

There are no scheduled economic releases for SA on Monday, with the focus instead on the ongoing strike at SAA that is threatening further economic damage.

The big event this week is the Reserve Bank’s final monetary policy decision of 2019, though the Bank is expected to keep the repo rate unchanged at 6.5% on Thursday.

Later on Monday private hospital operator Netcare is expected to report that headline earnings per share (heps) is likely to surge as much as 240% in its year to end-September, largely due to UK-related transactions as it classified operations as discontinued.

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