Asian Markets Retreat; Oil Climbs

18/02/2021 Asian equities pulled back on Thursday, weighed down by some of the region’s largest technology-related stocks. Chinese stocks pared gains after the initial jump, as trading resumed following Lunar New Year holidays. The S&P 500 closed flat as investors digested retail sales and PPI data that showed strength in the economic recovery. Technology stocks trailed. Oil prices extended gains as Texas cold snap cuts U.S. output. Brent crude climbed 1.1% to $65.30 a barrel, while WTI crude futures gained 0.83% to $61.65 a barrel. Gold was up on Thursday, but hovered close to its lowest level in more than two months as the dollar strengthened .
Gold futures were up 0.47% at $1,783.37. Silver held steady, while platinum and palladium gained.

Locally, on Wednesday, both JSE heavyweights Naspers and Prosus gained 4.07% and 3.05% respectively, but came short of keeping the local bourse above the waterline. The All-share index closed 0.17% weaker to 67,110.07, dragged down mostly by gold stocks that fell 5.46% on the day. Platinum miners were down 0.92%. Banks and retailers slipped 1.67% and 1.75%, while financials saw the session out 1.98% weaker.

NEWS:
• Discovery Says Over 50% of South Africans May Have Had Covid-19
• South Africa Begins Vaccine Rollout After J&J Shots Arrive
• Inflation Bets Put South African Rate Hike Back on the Table
EQUITY PREVIEW:
• South African Stocks Keep the Records Coming With Naspers Boost
• Prosus Is a ‘Must-Own Stock’ as BofA Increases PT to Street-High
• Tiger Brands Sees 1H EPS Increasing More Than Threefold
• AECI Expects Full-Year Headline EPS Between 20%-25% Lower
MEDIA SUMMARIES:
• ENCA: Treasury says Denel needs R500m to tackle liquidity challenges
• Business Day.za: Resilient surprises with talks to sell some retail assets
• Fin24: SOEs were the ‘honey pots’ of state capture – but we will find the stolen money, Gordhan vows
EARNINGS:
• 7:05am: Gold Fields (GFI SJ), FY
• 8am: Sibanye Stillwater (SSW SJ), FY
• c. 2:30pm Truworths International (TRU SJ), 1H
CORPORATE EVENTS:
• 10:30am: Naspers (NPN SJ) CEO Bob van Dijk gives media briefing on company progress

EU/UK/US
European shares finished lower as concerns that higher near-term inflation and rising government bond yields might eventually sap the strength in equities. UK National Statistics showed that CPI rose to 0.7% in January from 0.6% in December, with food and household goods the main drivers. Analysts had been expecting a nudge lower to 0.5%. The pan-European Stoxx was down 0.74%, alongside a 0.56% drop for London’s FTSE 100, Germany’s Dax was knocked 1.1% lower. British American Tobacco was in the red by 3.95% as it said full-year profits rose but the figure fell short of analysts’ expectations.

Wall Street closed mixed: the Dow was up 0.29%, while the S&P 500 slipped 0.03%, and the Nasdaq was 0.58% weaker at 13,965.50. The FOMC released the minutes from its January meeting, which revealed that officials thought the US economy was “far from” where they wanted it to be. That meant the central bank was likely to keep policy loose for the foreseeable future, with the short-term interest rate likely to remain near zero and asset purchases to be maintained – at least $120bn each month. U.S futures below the waterline this morning: Dow futures flat 0.09%, the S&P500 futures 0.24% weaker, while the Nasdaq’s are 0.54% in the red.

ASIA
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.17%, food delivery giant Meituan, Sony and Samsung Electronics were among the biggest drags on the MSCI Asia Pacific Index. Japan’s Nikkei225 fell 0.25%, Hang Seng 1.16% weaker (Tencent flat 0.07%), Shanghai Composite underperforming at 0.83%, while markets in Aussie are flat 0.02%.