Soaring JSE may get Naspers bump as China cuts rates again

The JSE, which closed above 76,000 points on Wednesday, may be on track for another positive session on Thursday after the People’s Bank of China cut rates amid concerns of a slowdown in the world’s second-largest economy.

The cut in borrowing costs follows one implemented in December, with China now grappling with the threat of Omicron, prompting strict lockdowns as the country pursues a “zero-Covid-19" approach.

Global markets have been fixated on the prospect of rising interest rates in 2022, as fuel prices continue their climb, with oil trading at an eight-year high this week.

Lower interest rates often benefit tech shares, increasing the relative value of future earnings, and in morning trade Hong Kong-listed Tencent was up 4.66%.

The Hang Seng had risen 2.33% and Japan’s Nikkei 1.33%, while the Shanghai Composite had added a more modest 0.23%.

Gold was flat at $1,839.23/oz, while platinum had risen 0.13% to $1,024, having jumped 4% on Wednesday. Brent crude was 0.66% higher at $88.24 a barrel, having risen more than 13% so far in 2022, with the International Energy Agency upping its forecast for demand on Wednesday, and warning that demand looks set to outstrip supply.

In early trade, the rand was 0.22% firmer at R15.295/$, extending a 1% gain in the prior session.

The JSE had closed above 76,000 points on Wednesday, lifted by Richemont, which added 5% after its third-quarter update beat expectations.

Data, however, also showed that inflation. as measured by the annual change in Stats SA’s consumer price index (CPI), hit 5.9% in December, faster than expected, and fuelling speculation that SA will see an interest rate increase later in January.

gernetzkyk@businesslive.co.za