JSE faces weaker Asian markets and slumping Tencent on Friday

The JSE must contend with sharply weaker Asian markets on Friday morning, as well as pressure on Tencent, after a rollercoaster week, particularly for energy prices.

Markets have been fixated on Ukraine and Russia, with Western sanctions ramping up on the latter, generating a fog of uncertainty for the globe’s economic prospects in 2022.

Oil had climbed to $133 a barrel before crashing almost 13% on Wednesday on news the United Arab Emirates was willing to lobby for further production increases, with Brent crude easing further on Thursday.

In morning trade on Friday the Hang Seng was down 3.2% and Japan’s Nikkei 2.47%, while the Shanghai Composite had lost 2.16%.

Tencent, which can influence the direction of the JSE via Naspers, had slumped 5.61%, with Bloomberg reporting that US regulators had identified five Chinese firms that may be delisted if they fail to adhere to certain auditing requirements.

Despite the yo-yo in equity markets, participation remains low, said SPI Asset Management managing partner Stephen Innes in a note.

“When confidence is low, risk managers are in the drivers’ seat, keeping bank and market maker liquidity to a minimum which could be exacerbating interday moves,” he said. “And no wonder as predicting day-to-day market actions is about as consistent as flipping a coin.”

The JSE needs to gain more than 1.1% to reach last Friday’s close, but would need to lose more than 0.24% to turn negative for the year to date.

In morning trade gold was 0.34% weaker at $1,989.10/oz and platinum 0.65% to $1,063/oz. Brent crude was flat at $109.20 a barrel.

The rand had weakened 0.36% to R15.08/$.

Standard Bank, SA’s second biggest by market value, is due to report an up to 60% rise in headline earnings per share for its year to end-December later, though it did not go into detail in its recent trading update.

gernetzkyk@businesslive.co.za