JSE likely to feel pinch of China’s crackdown on tech firms
Bourse expected to head lower following weaker trading in Asia
The JSE is likely to head lower on Tuesday, given the weaker trading picture in Asia, where anxiety over regulatory overhang has come to came to the fore.
In a latest twist, the China’s state media reportedly took aim at the technology companies by labelling online games “spiritual opium”.
Shares of Tencent, which has popular online games, fell as much as 11% in Hong Kong. Over the past week, the Chinese authorities stripped Tencent of exclusive music-streaming rights. The JSE is likely to feel the pinch through Naspers, which has a 29% interest in Tencent via its global internet arm, Prosus.
Elsewhere, rising Covid-19 cases fuelled by the Delta variant was another theme driving the markets lower. Still, markets have been pushing higher, with Wall Street hitting a series of record highs over the past week amid better-than-expected corporate results for the second quarter.
The JSE all-share is near a record high, though its performance has been disparate, driven by mining stocks and big industrial stocks, save for Naspers.
The rand was on a stronger footing, as it gained 0.27% against the dollar at R14.41/$ after slumping to nearly R15/$ over the past week, which was the lowest point since March.
The price of Brent was 0.74% lower to $72.68 a barrel amid demand worries. Extended lower oil prices and relative strength in the rand could potentially provide relief to consumers and businesses in the form of lower fuel prices, which are at record highs.
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