JSE may benefit from positive Asian markets on Wednesday

The JSE may benefit from some positive sentiment on Asian markets on Wednesday morning, with sentiment seemingly lifted by dovish commentary from US Federal Reserve policymakers.

Markets remain concerned about a the world's economic outlook, with hawkish rhetoric from central banks raising the concern that an aggressive fight against inflation will push many countries into recession. Earlier on Tuesday, New Zealand’s central bank hiked interest rates by 50 basis points.

Sentiment overnight seemed to stabilise around the same time Atlanta Fed president Raphael Bostic suggested the Fed may pause after two more 50 basis point hikes, National Australia Bank economics director Tapas Strickland said in a note. It is clear that economic headwinds are becoming more evident, said Strickland, notably through corporate profit reports.

On Tuesday Bosic warned against “recklessness” and that headlong rate hikes could create “significant economic dislocation”, Reuters reported.

In morning trade the Shanghai Composite was up 0.58%, the Hang Seng 0.56%, and the Australian All Ordinaries index 0.61%.

Tencent, which can influence the JSE’s direction through the Naspers stable, was up 0.3%.

Gold was 0.2% weaker at $1,862.75/oz while platinum was little changed at $955. Brent crude rose 1.09% to $114.84 a barrel.

The rand was flat at R15.66/$, having strengthened 0.68% on Tuesday.

Rhodes Food Group is due to release its results for the six months to end-March later, saying in a recent trading update that its headline earnings are expected to rise as much as 35%. However, the group, which has been bolstered by insurance proceeds, also warned that it had struggled to recoup surging input costs, and its share lost almost 20% when it released its trading update.

Private hospital operator Mediclinic, SA’s largest by market value, is due to release results for its year to end-March later. It said in a recent trading update that while profit margins were recovering as pressure from Covid-19 recedes, they have not  returned to pre-pandemic levels yet.

gernetzkyk@businesslive.co.za