JSE faces Asian markets pressure on Monday after China fines Tencent

The JSE faces the prospect of some significant Asian market pressure on Monday morning, with sentiment under strain after Chinese regulators fined both Alibaba and Tencent for past transactions.

Reuters reported that China’s State Administration for Market Regulation fined the two tech giants for not properly reporting past deals, indicating how fragile investor mood remains towards the sector despite signs of easing regulatory headwinds.

Tencent was down almost 3% in early trade, while Alibaba had lost almost 6% and the Hang Seng was down 2.74%. The Shanghai Composite had lost 1.74%, while Japan's Nikkei was up 1.23%.

Covid-19 numbers in China are also ticking higher again and on Sunday, Shanghai reported the first case of the highly contagious BA.5 sub-variant, said SPI Asset Management managing partner Stephen Innes in a note.

“The latter is creating some negative chop at the open, with China beta getting slightly tarnished but no worse for the wear as investors could be increasingly desensitised to Omicron risk in China,” he said.

Gold was flat at $1,741.40/oz while platinum had fallen 1.11% to $889. Brent crude was 2.43% higher at $106.50 a barrel.

The rand was 0.45% weaker at R16.95/$, and last traded at R17/$ in 2020.

The local corporate and economic calendars are bare on Monday, while stage 4 load-shedding continues.

International focus is on US inflation data this week, while second quarter earnings reports from major firms are also due.

gernetzkyk@businesslive.co.za