Picture: REUTERS/BRENDAN MCDERMID
Picture: REUTERS/BRENDAN MCDERMID

The JSE could take its lead from weaker Asian markets on Tuesday morning, with trade war concerns and disappointing economic data weighing on sentiment.

Local focus is squarely on GDP numbers for the third quarter, which are expected to show subdued activity.

Risk-off sentiment continued on Tuesday morning.

On Monday, US manufacturing data for November missed expectations, prompting a sell-off of US stocks.

US President Donald Trump has reinstated steel and aluminium tariffs on Brazil and Argentina, accusing the two countries of devaluing their currencies to the detriment of US farmers.

This compounded the risk-off tone, and while recent disappointing US manufacturing data should remind Trump of negative economic repercussions of trade war, the US administration continues to play the risky game of weaponising US economic power with tariffs, said AxiTrader chief Asian markets analyst Stephen Innes in a note.

In morning trade Japan’s Nikkei was down 0.7%, while the Shanghai Composite and Hang Seng lost 0.12%.

Gold was flat at $1,461.50/oz, while platinum was little changed at $828.20. Brent crude was up $61.20 a barrel.

Tencent was down 0.6% in Hong Kong.

The rand was little moved at R14.53/$, trading a one-month best after overnight gains. Though the tariffs on Brazil and Argentina had little effect, the poor economic data from the US put pressure on the dollar, said Peregrine Treasury Solutions treasury partner Bianca Botes in a note.

There is little on the local corporate calendar on Tuesday. SA’s GDP numbers for the third-quarter are due at 11.30am.

GDP growth rebounded to 3.1% quarter on quarter in the second quarter — a huge turnaround from the first quarter’s 3.1% contraction, when SA's economy was hit by load-shedding  and strikes, notably in the mining sector.

The Trading Economics consensus is for 0.4% quarter-on-quarter growth, and 0.1% growth compared to the same quarter in 2018.

gernetzkyk@businesslive.co.za