Tencent’s stumble may drag down the JSE
Tencent was down 2% to HK$388 ahead of the JSE’s opening on Tuesday, indicating its 31%-owner Naspers may drag the local bourse down on Tuesday.
Naspers accounts for 22.45% of the market capitalisation weighted top 40 index, so its movements tend to dictate the JSE’s average.
Tied in second place with a 10.16% weighting each are BHP and Richemont.
BHP was up 1.23% to A$34.28 in Sydney ahead of the JSE’s opening, so a rise by the mining group may mitigate Naspers falling to some extent.
Tuesday’s focus will be on how the pound reacts to the unfolding UK political drama, where, according to Reuters, Foreign Secretary Boris Johnson’s resignation threatens Prime Minister Theresa May by "emboldening some in her Conservative Party to mull a plot to unseat her".
The rand continued to strengthen overnight, trading at R13.42 to the dollar, R15.76 to the euro and R17.76 to the pound at 7am.
It is quiet on the JSE results front, and economic news is limited to the South African Chamber of Commerce and Industry (Sacci) releasing its business confidence index for June at 11.30am.
The index jumped from 95.1 points in November to peak at 99.7 points in January after the switch in South African presidents from Jacob Zuma to Cyril Ramaphosa; the index then declined steadily back to 94 points in May.
The June result is expected to show the return to pessimism in the business community has bottomed out, with a small rise to about 94.3 points.