The JSE looks set to start to weaker Asian markets on Thursday morning, with investors still mulling a mixed economic outlook and the prospect of further hefty interest rate hikes.
US Federal Reserve minutes were interpreted as mildly hawkish, indicating policymakers still see the need for as series of rate hikes to tame inflation, even if the pace slows.
Helping that interpretation was a repeat of the line that “it likely would become appropriate at some point to slow the pace of policy rate increases” National Australia Bank (NAB) economist Taylor Nugent said in a note.
On the other hand, said Nugent, the Fed had also indicated that inflation could become entrenched if the public began to doubt the intention to get on top of inflation, and it was important to move to a restrictive policy level as soon as possible.
There was also a series of mixed economic news on Tuesday, with UK inflation coming in at a higher-than-expected 10.1% in July. US retail sales were flat that month, while economists had expected a 0.1% month-on-month rise.
In morning trade, Japan’s Nikkei had fallen 0.82%, while both the Hang Seng and Shanghai Composite had lost 0.48%.
Tencent, important to the JSE due to the Naspers stable, had gained 3.1%, and was flat on Wednesday, despite reporting its first-ever quarterly revenue decline, having informed the market it would be cutting costs to boost profit.
The rand was 0.19% weaker at R16.69/$.
Gold was flat at $1,762.45/oz while platinum had fallen 0.23% to $919.10. Brent crude had gained 0.95% to $93.69 a barrel.
Private school group Curro is due to release its results for the six months to end-June later, indicating in a recent trading update headline earnings per share (HEPS) could rise by as much as 50%. The group has indicated it has benefited from easing Covid-19 restrictions, with many of the pupils who left during the pandemic returning.
Exxaro is also due to release its half-year report to end-June later, expecting HEPS growth of as much as 32%, with a strong performance from its coal business being offset a little by its iron ore interests.
With Bloomberg
gernetzkyk@businesslive.co.za
