Asia-Pacific Stock Markets Mixed After China Data Better Than Feared

15/07/2021 Markets in Asia region were mixed on Thursday as traders digested data suggesting China’s growth rebound is steadying. China’s 2Q2021 economic growth fell short of analysts’ forecasts on an annual basis, with GDP growth slowing to 7.9% (versus 8.0% expectations) from a year earlier from a record 18.3% expansion in the January-March period. U.S. Federal Reserve Chair Jerome Powell’s signal that it’s still too early in the U.S. recovery to pare stimulus. Shares slipped in Japan and advanced higher in China. Hong Kong rallied, with a report of possible cooperation between Alibaba Group Holding Ltd. and Tencent Holdings Ltd (currently 2.25% firmer). U.S. futures contracts are flat ahead of more earnings and jobs data. Treasury yields fell and the dollar trimmed a retreat.

Gold: rising U.S. inflation helped boost demand the yellow metal as a store of value. The Bullion steadied near a four-week high as Federal Reserve Chair Jerome Powell reassured investors on the outlook for stimulus. Gold currently flat 0.01% at $1827.93

Oil: the black liquid extended losses as U.S. stockpiles expanded unexpectedly and OPEC+ nears a deal. Brent oil futures currently on the backfoot 0.77% at $74.21, while light sweet WTI slid 0.83% to be trading at $72.54.
Here are some events to watch this week:
• China second-quarter GDP, key economic indicators Thursday
• Bank of Japan interest rate decision Friday

Locally, the rand broke a two-day loosing streak and currently trading below the R14.50/$ mark. Retailers and miners led the gains on the JSE as investors. The local bourse gained 1.21% to 67,897 points and the Top-40 bagged 1.33%. Precious metals rose 1.91%, resources 1.5% and banks 0.57%. Listed property lost 1.74%. According to the Consumer Goods Council of SA (CGCSA), the number of shops looted exceeded 800 by Tuesday evening, with more than 100 completely gutted by fire. The council is warning that South Africans could run out of food as trucks cannot deliver goods to stores, while a number of retail warehouses have been destroyed. Mr Price rose 4.46% to R206.72 after losing nearly 6% on Tuesday, while Pick n Pay recovered 1.5% to R52.10.

NEWS:
• Business Unity South Africa to brief media on state of disaster
• South African Rand Becomes Currency to Short Amid Turmoil
• Food Shortage Set to Grip South Africa After Rioters Rampage
• Vaccine registration for 35 to 49-year-olds to begin15 July

EQUITY PREVIEW:
• South Africa Stocks Rally With Rand Hedges Up as Unrest Persists
• Rioting Prompts Investors to Exit South African Property Stocks

EU/UK/US
Markets in the continent were little changed by the end of trading on Wednesday despite ongoing concerns around the increasing in cases of the Covid-19 Delta variant while a rise in UK and US inflation stoked fears of higher interest rates.
The pan-European Stoxx 600 index slipped just 0.09%, alongside the FTSE100 ;slipping 0.47% at the end of the day, while both the CAC-40 and Dax were flat. The FTSE100 is currently on the backfoot -18 points, on inflation fears, alongside the DAX below the watermark -30 points – IG markets.

Wall Street’s three main indices closed in a mixed state as 2Q2021 earnings from some of the biggest banks in the country rolled in. At the close, the Dow was up 0.13% and the S&P 500 added 0.12%, while the Nasdaq 0.22% to 14,644.95.
Producer inflation spiked, rising 7.3% in the 12 months through June, the biggest year-on-year rise since November 2010. Analysts had been expecting a rise closer to 6.8%. Bank of America was down 2.51% after it posted second quarter revenues of $21.6bn, just shy of estimates for a print of $21.8bn. Dow futures -0.18%, S&P500 – 0.08%, while the Nasdaq futures are up 0.17%

ASIA
Japanese stocks sank on Thursday, dragged by caution ahead of corporate earnings season and a surge in COVID-19 cases a week before the Tokyo Olympics get underway. The Nikkei225 dropped 0.9%. Tokyo reported 1,149 new infections on Wednesday, the most since mid-January, despite a new state of emergency that began on Monday and runs through Aug. 22. Australian shares edged lower as “buy now, pay later” stocks, including Afterpay , extended their fall to a second day on report of technology giant Apple Inc entering the sector. The S&P/ASX 200 index slipped 0.26%, with losses lead by both financials and communication services. Hang Seng 1.17% firm, alongside the Shanghai Composite advancing almost 0.50%.