Tencent rises 9.30% in early trade after falling 46.67% so far this year
04 November 2022 - 07:41
by Nico Gous
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The JSE, in particular heavyweights Naspers and Prosus, looks set to be buoyed by Tencent’s rally of 9.30% on Friday morning sparked by pressure on authorities to end the strict zero-Covid policy in mainland China.
The Hang Seng jumped 6.81% and the Shanghai composite 2.48% while the Nikkei in Japan retreated 1.94%. Year to date, the Hang Seng is down 29.95%, the Shanghai composite 15.41% and the Nikkei 7.42%.
Tencent, which influences the JSE via Naspers and Prosus, has plunged 46.67% so far this year.
Traders will closely monitor key meetings in China, including one in early December where the new leadership will set out its future economic policy, even though there have been no signs of the government easing its stance on Covid-19.
“Investors are betting China’s reopening pivot will happen well before the Fed pivot. Without official confirmation, the reopening view continues to be expressed via growth equities this week,” SPI Asset Management managing partner Stephen Innes said in a note.
“Once a reopening becomes clearer or lockdowns become less common, industrial metals, oil prices and the currencies of associated China exporters should benefit as a second-round effect,” he added.
Japanese markets only felt the impact on Friday of the US Federal Reserve hiking interest rates again after markets were closed on Thursday for a public holiday.
In local market news, the JSE slumped in line with global markets on Thursday and the rand weakened to the lowest in a week after the US Federal Reserve struck a hawkish tone at its monetary policy committee meeting a day earlier.
The Fed on Wednesday raised its federal funds rate by 75 basis points for the fourth straight meeting, lifting the benchmark to 3.75%-4%.
“Market moves overnight have been dominated by the fallout from the Fed meeting, at which Powell emphasised a higher-for-longer interest rate outlook,” Bank of New Zealand senior interest rates strategist Nick Smyth said in a note.
The JSE fell 1.6% to 66,046.65. All the market sub-indices were lower, including the top 40, which was down 1.67%.
US markets closed in the red on Thursday, as the Nasdaq ended 1.73% lower, the S&P 500 1.06% and the Dow Jones 0.46%. The Nasdaq has lost more than one-third (34.67%) so far this year, the S&P 500 over one-fifth (22.45%) and the Dow Jones 12.53%.
The rand strengthened 0.50% against the dollar, trading at R18.32 on Friday morning. The rand has depreciated by 12.57% against the greenback so far this year.
Commodities prices rallied again with platinum increasing 1.75% to $931.00, Brent crude 1.34% to $95.81 a barrel and gold 1.05% to $1,646.05/oz.
In corporate news, Exemplar REITail will release their interim results.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
JSE looks set to be lifted by Tencent rally
Tencent rises 9.30% in early trade after falling 46.67% so far this year
The JSE, in particular heavyweights Naspers and Prosus, looks set to be buoyed by Tencent’s rally of 9.30% on Friday morning sparked by pressure on authorities to end the strict zero-Covid policy in mainland China.
The Hang Seng jumped 6.81% and the Shanghai composite 2.48% while the Nikkei in Japan retreated 1.94%. Year to date, the Hang Seng is down 29.95%, the Shanghai composite 15.41% and the Nikkei 7.42%.
Tencent, which influences the JSE via Naspers and Prosus, has plunged 46.67% so far this year.
Traders will closely monitor key meetings in China, including one in early December where the new leadership will set out its future economic policy, even though there have been no signs of the government easing its stance on Covid-19.
“Investors are betting China’s reopening pivot will happen well before the Fed pivot. Without official confirmation, the reopening view continues to be expressed via growth equities this week,” SPI Asset Management managing partner Stephen Innes said in a note.
“Once a reopening becomes clearer or lockdowns become less common, industrial metals, oil prices and the currencies of associated China exporters should benefit as a second-round effect,” he added.
Japanese markets only felt the impact on Friday of the US Federal Reserve hiking interest rates again after markets were closed on Thursday for a public holiday.
In local market news, the JSE slumped in line with global markets on Thursday and the rand weakened to the lowest in a week after the US Federal Reserve struck a hawkish tone at its monetary policy committee meeting a day earlier.
The Fed on Wednesday raised its federal funds rate by 75 basis points for the fourth straight meeting, lifting the benchmark to 3.75%-4%.
“Market moves overnight have been dominated by the fallout from the Fed meeting, at which Powell emphasised a higher-for-longer interest rate outlook,” Bank of New Zealand senior interest rates strategist Nick Smyth said in a note.
The JSE fell 1.6% to 66,046.65. All the market sub-indices were lower, including the top 40, which was down 1.67%.
US markets closed in the red on Thursday, as the Nasdaq ended 1.73% lower, the S&P 500 1.06% and the Dow Jones 0.46%. The Nasdaq has lost more than one-third (34.67%) so far this year, the S&P 500 over one-fifth (22.45%) and the Dow Jones 12.53%.
The rand strengthened 0.50% against the dollar, trading at R18.32 on Friday morning. The rand has depreciated by 12.57% against the greenback so far this year.
Commodities prices rallied again with platinum increasing 1.75% to $931.00, Brent crude 1.34% to $95.81 a barrel and gold 1.05% to $1,646.05/oz.
In corporate news, Exemplar REITail will release their interim results.
gousn@businesslive.co.za
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