JSE. Picture: MICHAEL ETTERSHANK
JSE. Picture: MICHAEL ETTERSHANK

SA stocks could open mixed on Wednesday after China moved to stabilise its currency amid a bruising and protracted trade war with the US.

After falling in prior trading sessions, US stocks closed higher overnight, with the S&P 500 Index adding 1.3%.

“The People’s Bank of China’s stronger-than-expected fixing of the yuan yesterday, and reiteration that it won’t seek to competitively depreciate the currency, helped stabilise markets,” analysts at ANZ Banking Group said on Wednesday. “The US expects China to visit in September for further trade talks — news that also allayed fears of a further escalation in the trade war.”

This came after trade tensions between the world’s two biggest economies mounted, with the US calling China a currency manipulator after Beijing retaliated to fresh tariffs on its exports.

Hong Kong’s Hang Seng Index opened sharply lower on Wednesday but pared some of those losses through the morning session. The index was 0.4% down at the lunch break, amid ongoing pro-democracy protests in the Chinese special administrative region.

The Shanghai Composite was flat, while Japan’s Nikkei 225 lost 0.4% and Korea’s Kospi 0.2%. Australia’s main benchmark rose 0.7%.

WeChat owner Tencent, which is 31% owned by Naspers, was 0.3% up in Hong Kong. But JSE-listed miner BHP Group fell 1.3% in Australia amid weakness in the bulk-commodity market.

Glencore, which produces copper, cobalt and coal, is due to report half-year numbers on Wednesday.

The miner said recently its African copper business had been underperforming. The group’s internally sourced copper production of 663,000 tons in the interim period was 5% lower than the previous year.

Packaging company Mpact is also due to report interim results. It said recently that headline earnings per share rose by between 21.3% and 37.7%.

Meanwhile, a local business-confidence reading is due on Wednesday, and the SA Reserve Bank is expected to publish data on its gold and foreign exchange reserves, along with statements of assets and liabilities.

The rand was weaker against major currencies on Wednesday morning amid a broader sell-off of risk assets. The local currency was trading at R14.98/$, R18.22/£ and R16.80/€.

Gold, the safe-haven asset that has benefited from heightened uncertainty, rose to $1,484.77/oz.

hedleyn@businesslive.co.za