JSE faces mixed Asian markets on Monday as US earnings season continues

The JSE looks set to contend with mixed Asian markets on Monday morning, with investor attention still on the US corporate earnings season and the potential inflationary threat posed by global supply-chain disruptions.

Positive third-quarter reports helped support US markets last week, with data group FactSet saying on Friday that with just less than a quarter of S&P 500 companies having reported, 84% had beat earnings expectations.

This has helped offset concerns over rising global inflation, and sent US markets to record highs, with major companies including Alphabet, Microsoft and Twitter due to report in the week ahead.

Markets were also digesting comments from US Federal Reserve chair Jerome Powell on Friday indicating that inflation concerns are likely to persist into 2022, though he said that while it is time to taper bond purchases, it is not yet time to raise interest rates.

Powell’s comments indicated that tapering will not only be announced out of next week’s Fed meeting but probably will commence almost immediately, rather than wait until December, said National Australia Bank analyst Ray Attrill in a note.

In morning trade the Shanghai composite was up 0.38% and the Hang Seng 0.11%, while Japan’s Nikkei gave back 0.83%.

Tencent, which gives direction to the local bourse via the Naspers stable, fell 0.69%.

Gold was up 0.36% to $1,798.89/oz while platinum rose 0.52% to $1,045. Brent crude gained 1.71% to $86.20 a barrel.

The rand was 0.25% firmer at R14.78/$.

ICT group Altron is due to report a sharp fall in profits for its half-year ending August later, a reflection of the outsize contribution of its UK-focused software business Bytes, which it recently hived off. The group’s trading update earlier in October prompted a 6.5% loss for the group’s shares on the day, their worst performance in five months.

gernetzkyk@businesslive.co.za