JSE faces mostly weaker Asian markets on Friday after Chinese GDP miss

The JSE looks set for further pressure stemming from Asian markets on Friday morning, with investors digesting disappointing Chinese economic data.

The world’s second-largest economy grew only 0.4% year on year in the second quarter, below expectations of a 1% rise, with Covid-19 restrictions weighing heavily on activity.

The data adds to pre-existing jitters about the state of the world economy, with the market starting to bet on the prospect of a 100 basis point hike in the US later this month, after consumer inflation numbers for June surprised to the upside.

In morning trade the Hang Seng was down 1.24% and the Shanghai Composite 0.24%, while Japan’s Nikkei had added 0.65%.

Tencent, which gives direction to the JSE via the Naspers stable, had lost 1.91%.

Gold was flat at $1,708/oz while platinum had fallen 0.53% to $845. Brent crude was up 0.47% at $99.87 a barrel.

The rand was 0.26% firmer at R17.14/$, having slipped 0.91% on Thursday.

The local corporate and economic calendars are bare on Friday, when the JSE needs to add about 5.3%, or 4,000 points, to reach last week’s close, which would be interesting.

International focus is also on US earnings, with major financial firms including BackRock, Citigroup and Wells Fargo set to report on Friday.

The higher interest rates may have increased the banks’ interest margins, but inflation certainly ate a part of that margin, Swissquote Bank senior analyst Ipek Ozkardeskaya said in a note on Thursday.

“Plus, lower trading volumes and slower loan activity due to the recession fears may have weighed on second-quarter earnings,” she said.  

gernetzkyk@businesslive.co.za