JSE could benefit from buoyant Asian markets on Friday as US pushes infrastructure spend

The JSE looks set to open amid an upbeat session on Asian markets on Friday, with sentiment bolstered by US plans to push ahead with about a $1-trillion (R14.2-trillion) infrastructure bill.

The White House announced on Thursday it had struck a preliminary bipartisan deal for the infrastructure spend, boosting its chances of getting through Congress.

This boosted sentiment, with the S&P 500 rising to a record high.

“Any company remotely associated with picks and shovels, materials and earth moving had a good day,” said Oanda senior market analyst Jeffrey Halley in a note. There were still challenges, he said, with the bill expected to form a package that could include social spending plans, and corporate tax increases.

Global focus is expected to remain on the US on Friday, with personal consumption data for May due later, which is the US Federal Reserve’s preferred measure of inflation. This is being closely watched as the Fed continues to maintain it expects a spike in inflation to be transitory, but last week had brought forward its timeline on interest rate increases to 2023, having guided 2024 previously.

In morning trade on Friday the Hang Seng was up 1.14%, the Shanghai Composite 0.79%, and Japan’s Nikkei 0.78%.

Tencent, which gives direction to the JSE via the Naspers stable, had gained 1.8%.

Gold was up 0.15% to $1,777.50/oz and platinum 0.17% to $1,098.41. Brent crude was 0.13% higher at $75.66/$.

The rand was 0.18% firmer at R14.18/$.

The local economic calendar is bare on Friday.

In corporate news, embattled Steinhoff International is due to release its half-year results to end-March later. Steinhoff was subject to one of SA’s biggest accounting scandals and lawsuits from aggrieved shareholders, which pose an existential threat to the group.

In May, the group listed European discount retailer Pepco, raising about €1bn (R17bn) in the public offering.

Steinhoff’s shares have almost doubled in 2021, but are still down almost 98% over the past five years.

Coal miner Wescoal is due to release its results for the year to end-March later, saying in a recent trading update it expects an improvement in its headline loss per share.

Sales for the period were 25% higher than the prior year, signalling an improvement in coal offtake from Eskom, but the increase has also been due to a sales contract being recorded for the full-year for the first time. The coal offtake by Eskom remains lower than before SA was affected by national lockdowns, it said.

gernetzkyk@businesslive.co.za