JSE faces mixed Asian markets as US markets close lower

The JSE is facing mixed Asian markets on Tuesday as some investors brushed aside Friday’s message from US Federal Reserve chair Jerome Powell’s that the US economy would need tight monetary policy “for some time” before inflation is under control and will “bring some pain to households and businesses”.

Powell’s message is driving the current wave of global market sell-off, which saw the JSE finish weaker on Monday, with the all share closing 1.38% down at 69,207 points, the lowest level in a week.

“It seems investors are still digesting the consequences from Fed chair Powell’s hawkish speech in which he not only refuted the notion of a dovish pivot but emphasised the need for rates to head higher and remain restrictive in order to bring inflation to heel,” National Australia Bank currency strategist Rodrigo Catril said in a note on Tuesday.

The Nikkei was up 1.12% after recovering from the sharp fall in previous sessions and digested Japan’s latest unemployment rate, which stood at 2.6% for the third month in a row in July.

The Hang Seng was down 0.9% after the three major indices on Wall Street — S&P 500, Dow Jones and Nasdaq — closed at one-month lows overnight. The Shanghai composite was down 0.57%.

Investors are watching Sino-US relations closely as tensions continue to simmer over Taiwan as US President Joe Biden reportedly prepares to approve a $1.1bn arms sale to the island nation and the latest from the audit deal struck between Beijing and Washington to grant US regulator access to the audit documents of US-listed Chinese. US regulators have been pushing for this for more than a decade, but Beijing previously cited national security concerns.

Tencent, which influences the JSE via Naspers, is down 1.24%.

Gold and platinum were lower at $1,734.70/oz and $860.60, respectively. Brent crude was down 0.5% to $104.35 a barrel.

The rand was flat at R16.83/$.

Tuesday’s corporate calendar is packed with Old Mutual, Harmony Gold, Brimstone, Master Drilling, Stadio, Super Group and Transpaco releasing results.

On the economic front, the SA Reserve Bank is releasing the July M3 money supply and private sector credit data at 8am. At 10am, Stats SA will unveil the tourism and migration data for June before publishing the latest victims of crime survey at 11am.

gousn@businesslive.co.za