JSE faces struggling Asian markets on Monday after dismal Chinese data
Data on Monday painted a dire picture for the world’s second-largest economy, which is still grappling with a wave of Covid-19
The JSE faces mixed Asian markets on Monday morning, with sentiment dented by some poor economic data out of China, which is still battling with Covid-19 outbreaks in major cities.
Chinese industrial output unexpectedly fell 2.9% in April from a year ago, while retail sales contracted 11.1% in the period, much worse than the expected 6.6% fall. The unemployment rate climbed to 6.1% and the youth jobless rate hit a record, Bloomberg reported
The worse-than-expected data comes as fear builds over the prospects of the global economy in 2022, which has been battered by the fallout from the war in Ukraine, with central banks expected to act rather aggressively to rein in inflation.
The local bourse rose by more than 2% on Friday after US Federal Reserve chair Jerome Powell once again played down the chances of 75 basis point interest rate hikes, comments that followed hotter-than-expected inflation numbers for April
In morning trade the Shanghai Composite was down 0.51% and the Hang Seng 0.37%, while Japan’s Nikkei was up 0.43% and Australia’s All Ordinaries index 0.23%.
Tencent, which can influence the JSE via the Naspers stable, lost 1.13%.
Gold was flat at $1,810.26/oz while platinum gained 0.25% to $943. Brent crude was 0.56% weaker at $109.67 a barrel.
The rand was 0.36% weaker at R16.21/$.
SA’s second-biggest mobile operator, Vodacom, is due to release its results for the year to end-March later, though it has not released a recent trading update.
Property developer Calgro M3 is due to release its results for the year to end-February later, and has flagged a sharp rise in profit for the period, partly benefiting from the recent closure of its construction business.
Poultry group Astral Foods is due to release its results for the six months to end-March later, flagging a more than doubling of headline earnings, citing the benefits of improved volumes and efficiencies in a recent trading update.
Local focus this week will be squarely on the Reserve Bank, which is expected to announce a 50 basis point interest rate hike on Thursday. Consumer inflation numbers for April are due the day before, and are expected to show an acceleration from March’s reading of 5.9%.