JSE faces weaker Asian markets as investors eye China and US Fed

The JSE looks set to contend with mostly weaker Asian markets on Tuesday morning, putting  a recovery from a 2% loss in the prior session in question, as investors continue to digest uncertainty from China and the future of US monetary policy.

The local bourse kicked off the week with its worst loss in just over a month, with a liquidity crisis at property developer Evergrande raising concerns about spillover effects for the rest of the market.

Commodity prices were also under pressure from concerns about the global economic outlook, while China also signalled at the weekend that it wanted to act to stabilise prices.

The week is also busy in terms of central bank activity, with policy announcements from the Reserve Bank and US Federal Reserve due on Wednesday and Thursday respectively.

Markets remain highly sensitive to any news regarding the timing of paring back monetary-support measures in the US, said Investec chief economist Annabel Bishop in a note.

Global financial market sentiment, and the rand, will be further weakened from current levels if the Fed says this week that it would, as opposed to may, be appropriate to start reducing asset purchases in 2021, said Bishop. Investec expects tapering to begin in December, with most of the market expecting it to begin either that month or in November.

In morning trade the Shanghai Composite was up 0.19%, while Japan’s Nikkei had fallen 1.85% and the Hang Seng 0.32%.

Tencent, which can give direction to the local bourse via the Naspers stable, had given back 1.76%.

Gold had slipped 0.12% to $1,761.88/oz while platinum had risen 0.82% to $918.54/oz. Brent crude was 0.44% higher at $74.53 a barrel.

The rand had firmed 0.2% to R14.75/$.

Correction: September 21 2021
An earlier version of this article said Remgro's results are due later, when they are scheduled for Wednesday.

gernetzkyk@businesslive.co.za