Johannesburg -The JSE opened a tad higher on Monday morning‚
with gold and platinum miners providing some support locally after having been
sold off on Friday‚ while banks were a bit softer.
At 9:56pm‚ the JSE All Share [JSE:J203] index was 0.12% higher
at 36‚825.69 points‚ with gold miners adding 0.73%‚ platinums up 0.54% and
banks flat (-0.03%).
“It is still early and not too much is happening yet. We saw
US markets closing lower on Friday‚ on weaker earnings from major US companies‚
with Microsoft and Google closing between 2% and 3% lower and McDonald’s
closing 4.5% lower after disappointing figures. These are major economics
bellwether stocks and are a good indication of the state of the US economy.
This pullback in the US has filtered through to our market this morning‚” a
local trader said.
Main European markets were also softer with the London FTSE
100 0.28% lower at 9.41am local time‚ while eastern markets were in the black
with the Japanese Nikkei 225 closing 0.09% higher and the Hang Seng last seen
Absa Capital said in a morning note that several important
inflation data points will be out this week with the consumer price index for
September due on Wednesday‚ followed by the producer price index for the same
month on Thursday.
“We are slightly above consensus for CPI (5.2% year-on-year‚
expecting a rise to 5.3% year on year‚ mostly on higher fuel prices. Local
petrol prices rose by 93c/litre in September. With PPI‚ we are in line with
consensus and expect a rise to 5.4% year on year due higher food and base metal
“All eyes will be on the medium-term budget policy statement
(MTBPS) on Thursday. Recent comments from the Treasury suggest a major effort
by government to rein in expenditure and‚ by extension‚ the budget deficit. We
are‚ however‚ of the opinion that a shortfall in revenue due to a worsening
economic outlook will confound such efforts‚ seeing the budget deficit nudge
wider to 5.3% of GDP from the 5.2% estimated in the February budget for
2012/13‚” the bank said.
“Tuesday sees the release of August leading indicator. This
indicator has been in annual decline since January‚ boding ill for SA’s growth
prospects over the next few quarters. We do not expect any marked improvement
in the indicator‚” it said.
“Internationally some key events to watch include the FOMC
on Wednesday. We and consensus expect rates to remain on hold with no
noteworthy changes to the statement‚ and US third quarter GDP figure on Friday.
Consensus expects a rise to 1.8% quarter on quarter (saar) from 1.3% quarter on
quarter in Q2 12‚ while the US Barclays team is more bullish with a 2%
forecast. Any upward data surprises out of the US are expected to be countered
by lacklustre data out the EU in the form of flash PMIs. The last time the
Manufacturing PMI for the euro area was in positive territory was July last
year‚ and is not expected to start improving soon‚” the bank concluded.