JSE gains as markets digest initial US-China trade deal
The US has maintained that tariffs against China may not be lifted until the second phase of the trade agreement is concluded
The JSE was positive on Thursday as markets mulled over the signing of the first phase of a trade deal between the US and China.
Regardless of the partial deal being concluded, the US has maintained that tariffs against China may not be lifted until the second phase of the trade agreement.
“Investors are still optimistic that the deal prevents further escalation. But now that it has been inked, questions are being raised about how much it really does for global growth,” said London Capital Group head of research Jasper Lawler.
As part of the deal that was signed on Wednesday, China has agreed to purchase an additional $200bn worth of US agricultural products over the next two years.
Key world stock market indexes climbed to record highs after the deal was signed on Wednesday in Washington, but later stalled on concern that it may not ease trade tension for long, Reuters reported.
Earlier, the Shanghai Composite was down 0.52%, while Hong Kong’s Hang Seng was up 0.38%. Japan’s Nikkei 225 was little changed.
In Europe, the FTSE 100 was down 0.21% while France’s CAC 40 was up 0.26% and Germany's DAX 30 was flat.
At 11.45am, JSE all share was up 0.16% to 58,154.3 points and the top 40 was 0.15% higher. Banks were down 0.42% and financials 0.49%, while gold miners were up 1.73%.
Diversified miner South32 said on Thursday it lowered its 2020 production guidance at its soon-to-be-sold SA coal business, citing wet weather and subdued local demand. The company's CEO, Graham Kerr, said in a statement that the group had taken a “disciplined approach to capital”, adding that the company's financial position remained strong.
The company share price share price was up 0.14% to R28.05 at noon on Thursday.
Locally, the focus is on the Reserve Bank's interest rate decision later on Thursday. The consensus among economists polled by Bloomberg is for the Bank to keep rates unchanged due to the threat to the rand posed by a possible junk status rating from Moody’s Investors Service. Some analysts do expect a cut, citing subdued inflation.