JSE faces mixed Asian markets on Tuesday as investors await fresh catalyst

The JSE looks set to contend with a mixed Asian trading picture on Tuesday morning, with markets seemingly struggling for direction after a recent recovery.

Global equities have been showing signs of life after heavy sell-off in recent weeks, but now that investors have priced in hefty interest rate hikes in major global economies there are hopes that economic conditions may prompt fewer hikes than expected in the second half of the year.

Oil prices, however, rose almost 3% on Monday. This followed a Reuters report that France’s President Macron was overheard saying that the UAE had informed him that both it and Saudi Arabia were maxed out on production capacity, Oanda senior market analyst Jeffrey Halley said in a note.

Additional pressure is coming from indications from Libya that it may declare force majeure on half of its production, said Halley, forcing investors to reassess the future path of interest rates.

“We could still see the equity bounce continue, though,” he said. “Markets are in a schizophrenic frame of mind day to day, but underlyingly are still desperately keen to buy this medium-term dip.”

In morning trade the Hang Seng was down 0.86%, while Japan’s Nikkei was down 0.26% and the Shanghai Composite was flat.

Gold was 0.19% higher at $1,826.24/oz and platinum was little changed at $908. Brent crude was 0.9% higher at $116.50 a barrel.

The rand was flat at R15.84/$.

Tencent, influential to the JSE due to the Naspers stable, had fallen 4.81%, extending a 1.56% loss on Monday. News that the Naspers stable was looking to pare its stake in the Chinese media giant to fund share buybacks helped Naspers rocket 22.79% on Monday.

Local quarterly employment statistics for the first three months of 2022, commonly known as nonfarm payrolls, are due later, and are expected to show some improvement given the easing nature of Covid-19 in the early part of the year.

Accelerate Property Fund, which owns shopping centres in Gauteng and office assets in Cape Town, is due to release results for its year to end-March later, saying in a recent update it expects a distribution of 18-22c per share. The group did not paid a distribution in 2021.

gernetzkyk@businesslive.co.za