17/08/2021 Most Asian markets are lower as concerns about the impact of the delta coronavirus variant on global growth eclipsed a record-breaking run in the S&P 500. The dollar and Treasuries rose. Signs of a slowing Chinese recovery, Beijing’s regulatory clampdown and mobility curbs to fight the delta strain are souring the mood in Asia. In New Zealand, officials said they are investigating a Covid-19 case, triggering a tumble in the currency and bond yields. Australia’s dollar slid after the central bank signaled it’s ready to act if lockdowns take a bigger economic toll.
Locally the JSE was dragged lower by NPN and PRX which closed down 7.38 and 5.07 percent respectively, the All Share closed 0.81% lower. Volumes were massive after Naspers completed a controversial deal to set up a cross-holding structure with subsidiary Prosus meant to reduce its weighting on the JSE, ending a process that has been opposed by investors. Prosus has completed the deal to set up a cross-holding structure between the two companies through a complex share swap. R 66.5 bln traded on the JSE with NPN and PRX trading in R 22.9 and R 22 bln respectively. MTN led the gainers up 8.5% after solid 1H results. We in for another softer open as world markets drift lower and Tencent trades down 4.5%. IG markets Top 40 is 83 points lower.
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European markets are set to open slightly lower on Tuesday, on track to extend losses after snapping a 10-day winning streak in the previous session. All major bourses futures contracts point to softer open. Investors will be monitoring economic data. The U.K. inflation rate data for July is scheduled at 7 a.m. London time, with euro area inflation rate figures for last month expected later in the session.
In the US, the Dow and S&P 500 posted their fifth straight positive sessions, rising 0.31% and 0.26%, respectively. Each clawed back early losses to both hit intraday and closing all-time highs. The Nasdaq Composite, however, declined 0.2% to close in the red. The S&P 500′s move during Monday’s session is especially notable since the benchmark index has now doubled from its pandemic closing low on March 23, 2020. This marks the fastest bull-market doubling since World War II, according to calculations from CNBC. The closely watched retail sales data will be released later today by the Census Bureau, with the Street expecting the reading to show a slowdown in July as the delta variant spread. Economists surveyed by Dow Jones are calling for a 0.3% decline for last month, after June’s reading showed a surprise 0.6% jump.
Shares in Asia-Pacific were mostly lower, with Chinese internet stocks in Hong Kong falling again as regulatory fears resurfaced. On the Hang Seng, shares of Tencent dropped 4.57% while Alibaba dropped 2.77% and JD.com slipped 3.26%. The Hang Seng Tech index slipped 1.15%. Those losses came after China’s market regulator issued draft rules aimed at stopping unfair competition on the internet.
Oil prices are steady, recovering from yesterday’s sell off as investors sought bargains and on expectations that major producers will not boost supply soon, though fears of weaker global demand amid surging pandemic capped gains. Brent $ 69.41, WTI $ 67.22
Gold prices are steady, hovering near an over one-week peak, as support from safe haven demand amid rising delta variant cases offset pressure from a firmer dollar. Gold + 0.28% $ 1792.
Here are some events to watch this week:
• U.S. Fed Chair Powell hosts a town hall discussion with educators Tuesday
• China’s top legislative body, the National People’s Congress Standing Committee, begins a four-day meeting in Beijing Tuesday
• U.S. retail sales are due Tuesday
• Reserve Bank of Australia minutes are scheduled to be released Tuesday
• Reserve Bank of New Zealand policy decision and briefing by Governor Adrian Orr Wednesday
• FOMC minutes released Wednesday
• Bank Indonesia rate decision and Governor Perry Warjiyo briefing Thursday