JSE to contend with weaker Asian markets as investors eye US inflation
China’s lockdowns and the release of US inflation numbers later on Tuesday are weighing on sentiment
The JSE looks set to open to another weaker session for Asian markets on Tuesday morning, with markets still concerned about China’s lockdowns, while US inflation numbers for March are due later.
US consumer inflation is expected to have remained at a more than four-decade high in March, and markets have been pricing in the prospect of back-to-back 50 basis point interest rate increases in May and June.
Inflation is expected to have risen to 8.4% in March, from 7.9% in February, which would be its fastest pace since 1981.
China’s surging Covid-19 numbers are also weighing on sentiment, given the country’s zero-tolerance approach.
The news is mixed, however, and while lockdowns in Shanghai and supply-chain disruptions in the country continue to mount, there are also signs of stimulus taps being opened that will be supportive once lockdowns end and China starts to pivot to living with Covid-19, National Australia Bank analyst Tapas Strickland said in a note.
In morning trade the Shanghai Composite had lost 0.6% and the Hang Seng 0.55%, while Japan’s Nikkei had fallen 1.55%.
Tencent, which influences the JSE via the Naspers stable, rose 2.32%.
Gold was up 0.24% to $1,958.88/oz while platinum was up 0.2% to $982.65. Brent crude was 0.87% higher at $100.14 a barrel.
The rand was flat at R14.57/$.
SA’s economic calendar is bare on Tuesday, while in corporate news Capitec, SA’s third-most valuable lender by market value, is expected to report that headline earnings per share (HEPS) rose by more than three quarters in its year to end-February. In the previous year the lender, like its peers, was heavily affected by provisions and economic pressure on clients stemming from lockdown restrictions.