JSE could open lower on Tuesday as trade tensions escalate
The JSE could open lower on Tuesday, adding to Monday’s 0.7% fall, as risk-off sentiment engulfs global equity markets after the stakes were raised in the trade dispute between the US and China.
The S&P 500 Index lost as much as 2.4% overnight after China retaliated to higher tariffs on its products by hiking tariffs on US goods.
US President Donald Trump tweeted that “China should not retaliate — will only get worse”.
Hong Kong’s Hang Seng Index, which was closed on Monday for a holiday, was 1.6% down on Tuesday and Japan’s Nikkei 225 lost 0.7%. The Shanghai Composite was 0.4% lower and Australia’s main benchmark 0.9%.
Chinese technology and gaming giant Tencent was 2.3% down in Hong Kong, while BHP Group lost 1% in Australia.
On the JSE, MiX Telematics and Mazor Group are due to report full-year financial results on Tuesday. Mazor said earlier in May its annual headline loss per share widened to between 15.2c and 15.4c a share.
Rebosis Property Fund is due to report half-year numbers. The landlord has warned that its distributable income in the year ending August 2019 was expected to be 52% to 62% lower than before.
Meanwhile, Statistics SA is scheduled to release a labour-force survey for the first quarter of 2019 before noon.
Investec economist Kamilla Kaplan said last week the survey was expected to show an increase in the unemployment rate to 27.5% from 27.1%.
“The unemployment rate typically rises in the first quarter of the year as temporary employees hired in the service sector over the festive season are typically laid off,” Kaplan said.
Elsewhere, the US will publish import prices, small business confidence and mortgage-application data, while the EU will release industrial production numbers. Germany is scheduled to publish consumer inflation numbers and the UK is expected to release employment data.
The rand was slightly stronger on Tuesday morning at R14.29/$, R18.51/£, and R16.05/€.