Asian Stock Markets Take A Dive; Wall Street Falls As Focus Turns to Spending Bill

31/03/2021 Markets in Asian hover lower on Wednesday as upward pressure on bond yields builds up, the dollar extending gains as it wraps up its best quarter in a year. Wall Street fell as traders awaited the President’s address on Wednesday in Pittsburgh, detailing an increase in federal spending aimed at strengthening U.S. infrastructure and addressing inequality. U.S. equity futures steadied, though below the watermark, after a lower close for the S&P 500 Index. Japan’s Nikkei underperforming after Mitsubishi UFJ Financial Group Inc. joined the list of firms globally to take a hit from the meltdown at Bill Hwang’s Archegos Capital Management LLC.

Gold was down on Wednesday, ending March on a lower note as China reported faster-than-expected growth in its factory activity and U.S. Treasury yields climbed. Gold futures were down 0.20% at $1,682.35. Oil prices rose, trimming overnight losses a day ahead of a meeting of OPEC and its allies, with investors betting the producers will largely agree to extend their supply curbs into May. Brent crude futures rose 15 cents, or 0.50%, to $64.65 a barrel.

On Tuesday, the JSE tracked global markets after a firmer and stronger close in both U.S. and Europe. All-share added 0.3% to 67,291 points and the Top 40 0.24%, with banks and general retailers gaining 0.74% and 0.70% respectively. The rand remained below R15/$, range bound between R14.92 to R14.98 to the dollar. After last night’s family-meeting at 19H30, the President keeps the country remaining under level-1 corona virus restriction, bowing to pressure from religious institutions and keeping alcohol banned for offsite consumption, or sales, only for the Easter weekend.

NEWS:
• Coca-Cola Is Said to Consider Options for $6 Billion Africa Unit
• South Africa Opens Up Lucrative State Phone Contract to MTN
• Moody’s Withdraws All Ratings for South Africa’s Land Bank
EQUITY PREVIEW:
• South African Stocks Rise Boosted by Richemont, Upbeat BofA Outlook
• SUPER GROUP CONSIDERATION FOR LEASEPLAN PURCHASE IS ZAR4.412B
ECONOMIC DATA:
• 2pm: Feb. Trade Balance Rand, est. 22.1b rand, prior 11.8b rand
CENTRAL BANK:
• 5pm: Deputy Governor Kuben Naidoo to deliver opening remarks at book launch
GOVERNMENT:
• 11am: Auditor-General releases audit outcomes of national and provincial departments

EU/UK/US
European shares held gain on Tuesday as investors shrugged off worries over the troubles at Archegos Capital and focused on the prospects of a post Covid pandemic economic recovery. The pan-European STOXX 600 index rose 0.71%, while Germany’s DAX index shot past 15,000 for the first time – closing 1.29% stronger. In parallel, in Paris the Cac-40 was ahead by 1.21%, alongside the FTSE100 gaining 0.53%. British Airways and Iberia owner IAG ascended 5.1%, with banks Barclays and HSBC also putting in a solid performance, rising 4.86% and 3%, respectively.

Wall Street stocks closed lower as elevated bond yields weighed on sentiment yet again. At the close, the Dow was down 0.31%, while the S&P 500 was 0.32% weaker and the Nasdaq was 0.11% softer. The yield on the benchmark 10-year Treasury note rose to 1.72%, at the top end of its recent range, stoking fears that money managers may have to make significant adjustments in their portfolios, creating heightened volatility during the Easter holiday-shortened week. U.S futures are steady, slightly below the watermark level.

Some key events to watch this week:
• President Biden is expected to unveil his infrastructure program Wednesday.
• EIA crude inventory report Wednesday.

ASIA
Asian stocks were on the backfoot on Wednesday, discounting Chinese PMI data that underpinned signs of a solid global economic recovery. MSCI’s broadest index of Asia-Pacific shares outside of Japan eased from a one-week high of 682.36 points to be last seen at 680.04. Japan’s benchmark Nikkei dipped 0.55, Australia’s S&P/ASX 200 added 0.78%. Hong Kong’s Hang Seng slipped 0.24%, while the Shanghai Composite 0.62. China’s factory activity rebounded in March from a three-month slowdown as export orders rose.