Tencent could boost the JSE on Wednesday as AECI reports
Investor sentiment remains buoyant on hopes for US-China trade deal
The JSE’s all-share index could get a boost from Tencent and global markets on Wednesday, with hopes for a US-China trade deal boosting risk sentiment.
Even though the International Monetary Fund (IMF) cut its global growth forecasts on Tuesday, citing policy “missteps” on trade and Brexit, investor sentiment remained buoyant thanks to upcoming in-person trade talks between US and Chinese representatives.
The S&P 500 Index gained 0.7% overnight, also aided by a handful of better-than-expected corporate earnings in the US.
“Asian markets may trade with a slightly firmer tone this morning on renewed hopes of US-China trade talks restarting in person next week,” analysts at Singapore’s OCBC Bank said earlier on Wednesday.
Hong Kong’s Hang Seng Index added 0.9% in morning trade, while the Shanghai Composite rose 1%. Japan’s Nikkei 225 gained 0.4%, though Korea’s Kospi slipped 0.3%. Australia’s main benchmark lifted 0.6%.
WeChat-owner Tencent, which influences the direction of the JSE via major shareholder Naspers, soared 3.1% in Hong Kong. But JSE-heavyweight BHP Group edged 0.3% lower in Australia.
JSE-listed chemicals and explosives group AECI is expected to publish financial results for the half year to end-June on Wednesday. The company said recently its headline earnings per share probably fell by 18%-22%.
Statistics SA will release consumer inflation data for June. A low reading could add to expectations for another domestic interest rate cut in 2019.
Elsewhere, purchasing managers indices are expected from the US and Europe, while new home sales data is due in the US.
The rand was slightly weaker on Wednesday morning after the South African government approved another bailout for Eskom and the IMF trimmed its growth outlook for SA.
The local currency was trading at R13.93/$, R17.33/£ and R15.53/€.