JSE may benefit from buoyant Asian markets on Monday as lockdowns ease

The JSE could benefit from some positive sentiment on Asian markets on Monday morning, with investors welcoming signs that Covid-19 lockdowns in China are coming to an end.

Beijing and Shanghai have started to relax restrictions after case numbers continued to drop at the weekend, with a further boost coming from the announcement of support measures aimed at helping with a recovery.

In Shanghai, approvals for property projects will accelerate, rents for some businesses will be cut, a purchase tax for some passenger vehicles will be reduced, and electric car subsidies will be outlined, said SPI Asset Management managing partner Stephen Innes in a note.

The reopening narrative has boosted global risk sentiment, particularly about the yuan, as hope arises for a return to some semblance of economic normality in China's services sector, said Innes.

Global sentiment also ended last week on a positive note, with US Federal Reseve minutes pointing to the prospect of a pause in that central bank's interest rate hiking cycle in the fourth quarter.

In morning trade, the hang seng was up 1.87% and Japan's nikkei 2.01%, while the Shanghai composite gained 0.37%.

Tencent, which can give direction to the JSE via the Naspers stable, rose 1.93%.

Gold was up 0.36% to $1,860.01/$ while platinum gained 0.36% to $958. Brent crude was up 2.34% to $120.04 a barrel.

The rand was flat at R15.57/$.

The economic calendar is bare on Monday. In corporate news, labour services group Adcorp is expected to report headline earnings per share more than doubled in its year to end-February. The group has said its training business has been showing recovery, while it has been focusing on exiting unprofitable contracts in its outsourcing division.

gernetzkyk@businesslive.co.za