31/08/2021 Asian stocks were mixed Tuesday as weaker economic activity in China and the latest escalation in Beijing’s crackdown on private industries overshadowed another record close on Wall Street. Equities slipped in China, where data signaled that an outbreak of the delta virus variant led to a service-sector contraction for the first time since February last year. Hong Kong slid as Beijing’s stepped-up curbs on video-gaming firms weighed on Chinese technology stocks. U.S. futures edged up after the S&P 500 hit its 12th all- time high in August and the Nasdaq 100 rose. Treasuries held gains made following Federal Reserve Chair Jerome Powell’s measured comments about a possible reduction in stimulus and any future interest-rate hikes. The dollar dipped. Oil declined, with traders assessing the prospect of additional OPEC+ production. Aluminum and nickel advanced as Goldman Sachs Group Inc. raise target prices. In cryptocurrencies, Bitcoin fell to about $47,000. Tencent was down more than 3% earlier in HK, after China Slashes Kids’ Gaming Time to Just Three Hours a Week, but has recovered since trading up over 1.5%. The Rand is firm around 14.62 vs the USD, with the FTSE JSE Top 40 futures indicating a better start up 430 points or 0.71%.
Here are some key events to watch this week:
- OPEC+ meeting on output Wednesday
- Euro zone manufacturing PMI Wednesday
- U.S. jobs report Friday
Yesterday the FTSE/JSE Africa All-Share Index down 0.9% to 67,064, with Prosus and Naspers weighing the most as both counters closed down over 3% after more potential clamp downs by Chinese authorities in HK. Platinum counters also came under pressure, with Sibanye, Impala and Northam all closing down more than 1%, as Sibanye CEO Froneman Sees Risks to Palladium Price After 2025. The Rand was up 0.4% to 14.67 per US$, with the Yield on 10-year govt rand bonds that fell 4.60 bps to 9.12%
Eskom Holdings SOC Ltd., which supplies almost all South Africa’s electricity from coal-fired power plants, is considering spending 106 billion rand ($7.2 billion) on wind and solar energy by 2030. The power utility will also issues its annual results.
- Worrying Mutations in New Virus Strain Found in South Africa
- Biovac Raising 2 Billion Rand for Vaccine Plant in S. Africa
- China Slashes Kids’ Gaming Time to Just Three Hours a Week
- Barclays Sees S. Africa 2021-22 Budget Gap at 8.2% of GDP
- Steinhoff Adds to Gains as Longer Debt Deadline Boosts Sentiment
- Prosus Slips as China Online Gaming Curbs May Be Blow to Tencent
- Sibanye CEO Froneman Sees Risks to Palladium Price After 2025
- Tiger Brands Rises as Portfolio Consolidation Boosts Sentiment
- Absa Group Cut to Equal-Weight at Morgan Stanley; PT 164 rand
- Advtech Ltd. (ADH SJ)
- Harmony Gold Mining Co. (HAR SJ)
- Motus Holdings Ltd. (MTH SJ)
- Old Mutual Ltd. (OMU SJ)
- Eskom Holdings SOC Ltd.
- 8am: July Money Supply M3 YoY, est. 0.10%, prior 0.12%
- 8am: July Private Sector Credit YoY, est. -0.50%, prior -0.54%
- 2pm: July Trade Balance Rand, est. 48b, prior 57.7b
- Constitutional Court expected to rule this week on whether local government elections can be postponed to February
- Ministers to brief lawmakers on vaccination program
- Standing Committee on Public Accounts holds hearing with Eskom
- 11am: South Africa to Sell 1.3 Billion Rand of 8.75% 2044 Bonds
- 11am: South Africa to Sell 1.3 Billion Rand of 8% 2030 Bonds
- 11am: South Africa to Sell 1.3 Billion Rand of 8.5% 2037 Bonds
- Annual General Meetings: IAP AU, VKE SJ
- Earnings Calls: HAR SJ, MSP SJ, MTH SJ, SPG SJ
European stocks posted mild gains on Monday, dismissive of broadly positive trade elsewhere in global markets. The pan-European Stoxx 600 index rose less than 0.1% as market sentiment turned sour after data showed euro zone economic sentiment eased more than expected in August from a record high in July. The European Commission’s economic sentiment index fell after a marked decline in optimism in France and the Netherlands. U.K. markets were closed on Monday for a public holiday. Indexes for France and Germany also reported slight gains.
The S&P 500 set another record high on Monday as the stock market continued to rise in the final days of August. The broad market index gained 0.43% to set a new record high 4,528.79, while the Nasdaq Composite traded up 0.90% for its own all-time high 15,265.89. The Dow Jones Industrial Average underperformed, losing 55.96 points or 0.16% to close at 35,399.84. Key technology stocks led the way on Monday. Microsoft and Netflix each rose about 1.3%, and Apple jumped 3%. Shares of Affirm Holdings surged more than 46% after the buy now, pay later company announced a partnership with Amazon on Friday. Amazon’s stock rose about 2%. Financial stocks weighed on the broader market, with Capital One shedding 6% and Wells Fargo losing 2.8%. Airline stocks lost ground the European Union recommended that member countries reinstate a ban on non-essential travel to the U.S. due to the Covid-19. Shares of Paypal, rose 3.6% after CNBC reported that the company is exploring a stock-trading platform for its U.S. customers. Discount brokerage Robinhood, however, saw its stock fall 6.9% after SEC Chair Gary Gensler told Barron’s that banning the controversial payment-for-order-flow business model was “on the table.”
Shares in Asia-Pacific mostly slipped in Tuesday trade, as data showed slowing Chinese factory activity growth in August. In mainland China, the Shanghai composite fell 0.75% while the Shenzhen component shed 1.674%. China’s factory activity grew at a slower pace in August as compared with the previous month, data released Tuesday showed. The official manufacturing Purchasing Managers’ Index for August came in at 50.1, against July’s reading of 50.4. Hong Kong-listed shares of Tencent and Netease dropped as regulatory fears hit. They fell 3.18% and 3.46%, respectively, by Tuesday afternoon in the city. That came after new rules published Monday by China’s National Press and Publication Administration showed plans to limit the time that those under 18 years spend playing video games to just three hours a week. Hong Kong’s broader Hang Seng index dropped 1.43%. In Japan, the Nikkei 225 rose 0.57% while the Topix index advanced 0.32%. South Korea’s Kospi gained 0.61%. Elsewhere, the S&P/ASX 200 in Australia edged 0.38% higher. MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.46%.
Gold edged up in Asia — trading near the highest in almost four weeks — after falling Monday as buoyant stocks damped demand for the haven asset. Spot gold rose 0.3% to $1,816 an ounce, after dropping 0.4% on Monday. Silver and platinum advanced, while palladium edged lower.
Oil headed for the biggest monthly loss since October as investors weighed the prospect of additional OPEC+ production and the restoration of crude output in the U.S. after Hurricane Ida. West Texas Intermediate was 0.3% lower near $69 a barrel after rising 0.7% on Monday. While Gulf of Mexico crude producers are expected to gradually resume service after Ida crashed ashore in Louisiana, local refineries may be slower. The Organization of Petroleum Exporting Countries and its allies will meet on Wednesday to assess the global market and prospects for demand as the pandemic grinds on.
Copper futures rose in New York for a sixth session in seven days on Monday as Two more copper mines in top supplier Chile moved a step closer to strikes after union members rejected producers’ best offers in regular wage talks. Workers at BHP Group’s Cerro Colorado and Codelco’s Salvador voted overwhelmingly to walk off the job, although Chilean collective bargaining rules allow a period of mediation before strikes can begin. While the two mines are their respective owners’ smallest, they are adding to disruption risks in a nation that accounts for more than a quarter of global copper production.
Iron ore futures retreated as the market weighed a coming seasonal pick-up in Chinese demand against the prospect of a broadly weakening economy and more curbs on steel output. Earlier this week, Baoshan Iron & Steel Co., the listed unit of China’s biggest producer, flagged the potential for renewed price declines in iron ore. Futures on the Singapore Exchange fell 1.9% to $153.85 a ton, after earlier rising as much as 1.2%. In China, iron ore fell 2.2% while steel futures also retreated.