JSE faces mixed Asian markets on Tuesday as focus shifts to earnings

The JSE faces a mixed picture for Asian markets on Tuesday morning, with the spotlight shifting to US corporate earnings reports for the fourth quarter.

Market activity so far in 2022 has been driven by expectations of rising interest rates in the US, and investors will be looking at earnings reports as they consider the outlook for the US economy.

Markets have been pricing in the prospect of a US interest rate increase as soon as March, which has put pressure on tech shares, as the prospect of higher rates erodes the relative value of their future earnings.

High energy costs and supply-chain disruptions have been stoking global inflation as well, something that looks to persist as oil prices continue their climb, trading at a seven-year high. Houthi rebels from Yemen have reportedly used drones to attack fuel infrastructure in the United Arab Emirates, and there are concerns further strikes are on their way. 

Tension between Russia and the West over Ukraine is also stoking fears of higher energy costs, particularly in Europe, where gas prices reached record highs last year.

In morning trade the Shanghai Composite was up 0.94% and Japan's Nikkei 0.46%, while the Hang Seng had slipped 0.19%.

Tencent, which can influence the JSE via the Naspers stable, had given back 1.33%.

Gold was flat at $1,817.22/oz, while platinum had lost 0.51% to $969. Brent crude had added 0.86% to $87.24 a barrel, having now gained 12% so far in 2022.

The rand was 0.29% weaker at R15.42/$.

Mining production figures for November are due later, with economists polled by Reuters expecting a 4.25% rise year on year, having benefited from economic recovery in SA’s major trading partners, and buoyant commodity prices.

In corporate news, sugar producer Tongaat Hulett is due to hold an extraordinary general meeting later, asking shareholders to back a rights issue of up to R4bn as it looks to solve its unsustainable debt problem in SA.

gernetzkyk@businesslive.co.za