JSE faces positive Asian markets on Wednesday, amid focus on US earnings

The JSE looks set to open to a positive session for Asian markets on Wednesday morning, with markets welcoming some solid earnings reports out of the US, which has helped soothe concerns over supply-chain disruptions and inflation.

The world’s biggest pharmaceutical maker, Johnson & Johnson, on Tuesday beat analyst expectations for its third-quarter sales, adding to a long list of US companies that have surprised the market with the strength of their earnings.

US companies have reported strong earnings, with little in the way of downbeat 2022 forecasts, Oanda senior market analyst Jeffrey Halley said in a note. 

In morning trade the Hang Seng was up 1.24%, while the Shanghai Composite was flat, and Japan’s Nikkei had gained 0.27%.

Tencent, which gives direction to the JSE via the Naspers stable, had gained 2.3%.

Gold was 0.29% to $1,774.25/oz, while platinum was down 0.1% to $1,037. Brent crude was 1.4% lower at $84.95 a barrel, with oil coming under some pressure after China signalled on Tuesday it was willing to intervene to help cap surging coal prices.

The rand was flat at R14.50/$, having gained more than 1% on Tuesday, and putting the local currency at about a one-month high.

Pick n Pay is due to release its half-year results to August 29 later, saying in a recent trading update it expects to report sales growth of 4% to R46bn for the period, though this would have been an estimated 8% if the effects of the violent riots in July were excluded. Pick n Pay is still expected to report that headline earnings per share rose by more than a third in its first half.

Consumer inflation for September is also due out on Wednesday. The data is expected to show that inflation accelerated to 5% year on year, from 4.9% in August. Food and fuel costs are expected to remain elevated, while there will also be attention on rental inflation figures, which are surveyed in September.

gernetzkyk@businesslive.co.za