JSE to contend with mixed Asian markets on Wednesday, with Covid-19 still in focus

The JSE looks set to contend with mixed Asian markets on Wednesday morning, with worrying Covid-19 numbers in countries such as South Korea and the US putting pressure on riskier assets this week.

US markets, as well as the JSE, had recovered after a sharp fall on Monday that was prompted by the concern that the Delta variant of Covid-19 could slow the global economic recovery.

Markets are also waiting for the European Central Bank (ECB) policy announcement on Thursday. Policy is expected to be unchanged, but this is the bank’s first meeting since concluding its strategy review, and investors will be watching for any change in tone or forward guidance.

In morning trade the Shanghai Composite was up 0.6% and Japan’s Nikkei 0.58%, while the Hang Seng had fallen 0.37% and South Korea’s Kospi 0.35%.

Tencent, which can give direction to the JSE via the Naspers stable, fell 1.47%.

Gold was flat at $1,808.70/oz while platinum rose 0.36% to $1,071.86. Brent crude was 0.36% higher at $68.82 a barrel.

The rand was 0.53% weaker at R16.57/$.

There is little on the local corporate calendar on Wednesday, but SA’s consumer inflation numbers for June are due later, with the Reserve Bank’s latest policy announcement due on Thursday.

The expectation is that inflation has eased a little from May’s 5.2% annualised print, which was a 30-month high. Inflation is expected to slow as the effects of a sharp drop in oil prices in early 2020 begins to wane. Core inflation, which excludes volatile food and energy components, is expected to remain steady at about 3.1% year on year.

gernetzkyk@businesslive.co.za