JSE likely to pull back on Thursday
SA’s main bourse is up 2.4% this week, but US-China talks look set to push pause on the trajectory
The JSE, up 2.4% in the week so far, is likely to take a breather on Thursday as investors wait for updates on trade talks between the US and China.
After posting strong gains in the week to date, stock markets in the Asia Pacific were mixed on Thursday. The Shanghai Composite was up 0.6%, while equities in Japan and Korea were flat. Stocks in Singapore and Hong Kong fell, with the Hang Seng Index down 0.5% at the lunch break.
Tencent, which surged in prior trading days partly on news it was selling bonds to fund growth, was 0.9% down in Hong Kong. The owner of WeChat raised $6bn (R85bn) in a dollar bond sale.
Tencent’s decline on Thursday is likely to push Naspers shares lower, since Africa’s largest public company owns 31% of the Chinese technology conglomerate.
BHP Group, the third-largest constituent of the JSE’s top 40 index, was 1.1% down in Australia.
No major financial results are expected on the JSE on Thursday, as the reporting season winds down. Stats SA is scheduled to report electricity generation data for February in the afternoon.
The rand was flat against major currencies on Thursday morning, trading at R14.13/$, R18.62/£ and R15.89/€.
If the local currency firms to R14.12/$, that would “open the door to the important R14.00 mark”, said Bianca Botes, corporate treasury manager at Peregrine Treasury Solutions.
“Geopolitical events are taking a back seat at present with activities having only a marginal effect on the movement of the rand following its strong retracement on the back of Moody’s statement,” Botes said.
Moody’s Investors Service granted SA a reprieve last Friday, when it opted not to amend the country’s credit rating or outlook.