JSE to open to somewhat positive sentiment on Friday

The JSE looks set to contend with mostly higher Asian markets on Friday morning, with sentiment still somewhat positive as investors eye the possibility of the US easing off on tariffs on China.

The White House has been mooting tariff cuts in a bid to rein in surging inflation, while markets have also been showing signs of recovery this week, with easing commodity prices helping to temper expectations of future inflation.

While it is still unclear if a deal and its potential scale could be reached, market estimates suggest China’s export growth to the US could get a 20%-25% boost, SPI Asset Management managing partner Stephen Innes said in a note.

There was some uncertainty after reports that former Japanese prime minister Shinzo Abe collapsed amid the sound of gunshots at a political event on Friday, Bloomberg reported on Friday, prompting investors to look to safe haven assets.

In morning trade Japan’s Nikkei was still up 0.4%. while the Shanghai Composite had gained 0.17% and the Hang Seng 0.11%.

Tencent, which influences the JSE via Naspers, was down 0.46%.

Gold was up 0.16% to $1,741.73/oz while platinum had fallen 0.17% to $874. Brent crude was 1.09% higher at $105.11 a barrel.

The rand was up 0.35% to R16.75/$.

The local bourse will need to lose about 3.4% to close where it did last Friday, though there is little on the domestic calendar on Friday. Overnight, Fitch Ratings kept SA’s sovereign debt rating at BB- with a stable outlook. The agency cited government debt last year that was lower than previously anticipated, but further noted that debt stabilisation will remain challenging.

International attention will be on Japan on Friday, while US nonfarm payrolls numbers for June are due later, with economists expecting employers to have added 268,000 staff, from 396,000 in the prior month.

gernetzkyk@businesslive.co.za