The continued spread of the coronavirus may put the JSE on the back foot on Thursday, while locally the rand has given up the gains it made after the presentation of the budget.

The local currency was trading at R15.30/$ on Thursday morning, slightly weaker than it was before finance minister Tito Mboweni announced that the Treasury would keep taxes low and seek to cut the public sector wage bill, which takes up more than a third of the budget.

Analysts have warned that the budget may not result in a stabilisation of the state’s finances, as tough negotiations with unions over pay cuts still need to take place.

Asian markets were mixed on Thursday morning, with Japan’s Nikkei down 1.97%, while the Hang Seng had given back 0.62%. The Shanghai Composite was up 0.57%. Earlier, South Korea’s central bank opted not to cut interest rates, disappointing some, who expected a cut due to the coronavirus outbreak.

Tencent was down 0.82%.

Overnight Brazil, Greece and Macedonia confirmed new cases with an increase in cases in Italy, Iran and South Korea. Health authorities in both Germany and the US have said they expect the outbreak in their countries to get worse.

“Even with the mortality rate being on the low side of recent virus outbreaks, the potential for the virus to strain health systems remains considerable,” said National Australia Bank analyst Tapas Strickland in a note.

In morning trade gold was up 0.62% to $1,649.38/oz while platinum had risen 1.31% to $921.42 — although it had fallen more than 3% on Wednesday. Brent crude was 0.66% lower at $52.80 a barrel.

Locally, producer inflation data for January is due later, as are a number of corporate releases.

Restaurant group Spur is expected to report that profit rose in its half-year to end-December, partially due to the reversal of credit loss provisions, related to Grand Parade Investment selling its 10% stake in the group last year.

Retailer Massmart is expected to report a hefty loss for its year to end-December later, partially as a result of writedowns as it moves to close unprofitable Dion Wired and Masscash stores.

Impala Platinum is expected to report that gross profit rose about 90% in its half-year to end-December later, as lower production volumes were offset by much higher prices of platinum group metals.


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