JSE likely to fall after Hong Kong’s downgrade
The JSE could track much weaker Asian markets on Tuesday morning, with stocks in Hong Kong under pressure after Moody’s Investors Service downgraded the city’s credit rating.
Moody’s downgraded Hong Kong’s credit rating one notch to Aa3 from Aa2 on Monday and changed its outlook to stable from negative, saying institutions and governance in the city may be weaker than previously thought, Reuters reported.
At 6am SA time the Hang Seng was down almost 2%, while Shanghai’s Composite had lost 1%. Tencent, which influences the JSE via Naspers, was down 2.37%.
The IMF has trimmed its 2020 global growth forecast to 3.3% from 3.4% previously,
Importantly though, growth is still forecast to be stronger than the 2.9% recorded in 2019 with risks less skewed to the downside given preliminary signs the slump in manufacturing and global trade is starting to bottom, said National Australia Bank analyst Tapas Strickland in a note.
A weaker rand and higher commodity prices could boost the JSE’s precious metal miners on Tuesday, with platinum miners having already added 4.21% so far in 2020, amid surging palladium prices.
Gold was up 0.38% to $1556.38/oz while platinum was up 0.24% to $1,021.39. Brent crude was down 0.55% to $64.67 a barrel.
The rand was 0.17% weaker at R14.52/$.
There is little scheduled in terms of corporate releases on Tuesday, while some attention will be on the SA Reserve Bank’s leading indicator for November later.
Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.
Please read our Comment Policy before commenting.