JSE faces subdued Asian markets as focus remains on US-China tension

The JSE could take its lead from subdued Asian markets on Tuesday morning, as markets wait to see details of a possible phase 1 trade deal between the US and China.

The expectation that a partial deal will be formalised this week has ensured a positive start to the week for most global equity markets, with the US on Monday reversing its decision to brand China as a currency manipulator.

“I’m more confident now than ever that President [Donald] Trump will roll back even more tariffs sooner than later to boost the market and the slowing US economy,” said AxiTrader chief Asia markets strategist Stephen Innes in a note.

Data earlier showed that Chinese exports rose much faster than expected in December, though most Asian markets were subdued.

In morning trade the Shanghai Composite was flat, while Hong Kong’s Hang Seng was down 0.18%. Tencent, which influences the JSE via Naspers, had fallen 0.5%.

Gold had slipped 0.58% to $1,538.50/oz while platinum was down 0.6% to $963.70. Brent crude was flat at $64.26 a barrel.

The rand was little changed at R14.38/$. The local currency is waiting for direction from Thursday’s Reserve Bank policy announcement, said Peregrine Treasury Solutions corporate treasury manager Bianca Botes in a note.

The local corporate calendar is bare, while the FNB/BER consumer confidence index for the fourth quarter is due later in the day.

The index is expected to show that confidence remains subdued, with that index falling into negative territory in the third quarter of 2019.

gernetzkyk@businesslive.co.za