JSE faces positive Asian markets as investors await new catalysts

The JSE looks set to open to broadly positive Asian markets on Wednesday morning, with little major news to give investors clear direction.

China’s regulatory crackdown against some of its largest listed companies, the threat of the Delta variant and optimism about an improving global economic picture are the major themes on the market.

US retail sales numbers for July were well below expectations on Tuesday, but this follows recent strength for a number of other key indicators, notably those for the US labour market. Minutes from the US Federal Reserve’s last policy meeting are due out later on Wednesday, and could give further details about the world’s most influential central bank’s plans to pare back stimulus.

In morning trade, the Hang Seng was up 0.75% and the Nikkei 0.71%, while the Shanghai Composite had gained 0.56%.

Tencent, the Chinese tech giant of which the Naspers stable is the single-biggest shareholder, had eked out a 0.3% gain. Tencent was on track to break a four-session losing streak on Wednesday, which includes a more than 4% fall on Tuesday.

Gold was up 0.23% to $1,789.75/oz, while platinum had gained 1.31% to $1,010.55. Brent crude had gained 0.17% to $69.23 a barrel.

The rand was 0.38% higher at R14.84/$, having touch R14.99 on Tuesday — a more than three-week low.

Locally, private education group Curro is expected to report growth in both learners and revenue for its six months to end-June, though headline earnings per share (HEPS) are expected to slip, with the group having 42% more shares in issue after conducting a R1.5bn rights issue in September.

In economic news, consumer inflation, as measured by the annual change in the consumer price index, is due for July and expected to show moderation from June’s 4.9% year-on-year rise, amid slower fuel inflation.

Retail sales for June are also expected to show a fall from May’s 15.8% rise, with moderation expected to reflect waning of the effects on the sector of SA’s hard lockdown in 2020 as the country grappled with a first wave of Covid-19.

gernetzkyk@businesslive.co.za