Tencent’s fall could keep the JSE in check on Wednesday
Local bourse could follow Asian stocks lower as US-China trade tensions continue
The JSE, which has been on the front foot so far in June, could give up some of its gains on Wednesday morning as Asian markets retreat and Tencent falls in Hong Kong.
Asian stocks were mostly lower on Wednesday as attention shifts back towards US-China trade tensions. US President Donald Trump has said he would raise tariffs on Chinese goods if his counterpart, Xi Jinping, does not attend the Group of Twenty (G20) summit in late June.
“There is still no clear sign of a de-escalation of US-China trade tensions after President Trump defended his tariff strategy on Tuesday,” analysts at OCBC Bank in Singapore said.
“Meanwhile, US commerce secretary Wilbur Ross said the G20 is not ‘a place where anyone makes a definitive deal’, downplaying the probability of an imminent deal,” OCBC said.
Amid protests over an extradition bill in the Chinese special administrative region, Hong Kong’s Hang Seng index fell 1.6% on Wednesday morning. The Shanghai Composite declined 0.6%, and Korea’s Kospi 0.2%.
Japan’s Nikkei 225 was 0.1% down, while Australia’s main benchmark added 0.1%.
Chinese internet and gaming giant Tencent, which influences the JSE via major shareholder Naspers, fell 2.2% in Hong Kong.
On the other hand, JSE-heavyweight BHP Group surged 2.8% in Australia.
“Further support for infrastructure spending in China should see metals markets well supported this week,” analysts at ANZ Banking Group’s research arm said.
Meanwhile, the SA Chamber of Commerce and Industry is expected to publish a trade conditions survey for May on Wednesday morning, while Statistics SA is due to release retail trade sales figures for April.
The US is due to publish consumer inflation numbers later in the day.
On the JSE, Crookes Brothers is expected to publish results for the year to end-March. The group has said headline earnings per share are expected to be between 139.9c and 150.1c, compared with a headline loss per share of 50.6c previously.
The rand, which lost ground last week, was slightly stronger on Wednesday morning, continuing its recovery. It was at R14.66/$, R18.64/£, and R16.61/€.