JSE confronts lower Asian markets after US sell-off

It is going to be another hard day for the JSE, with Asian markets down again on Wednesday morning after losses on the US markets overnight.

It has been tumultuous on the markets lately as the concern about high inflation affects market sentiment, amped up this week by many central banks announcing their latest interest rate decisions, including the US Federal Reserve and the Reserve Bank on Thursday.

The Fed is widely expected to hike interest rates by 75 basis points (bps) as it tries to tame high inflation, which has subdued global markets for months.

Economists expect the Bank to raise interest rates by the same amount in what will be the sixth consecutive increase.

The Hang Seng in Hong Kong lost the most, with 1.51%, followed by Japan’s Nikkei, with 1.25%, and then the Shanghai Composite in mainland China, with 0.56%, in line with US markets.

“A sourer tone took hold over the past 24 hours, with equities lower and haven currencies, including the dollar, stronger,” National Australia Bank (NAB) economist Taylor Nugent said in a note on Wednesday.

Load-shedding did not help SA, Sasfin Wealth fixed income trader Alvin Chawasema said in a note on Wednesday.

Tencent, which influences the JSE via Naspers, fell 1.43%.

Commodities were a mixed bag. Platinum gained 0.36% as it traded at $925.50. Brent crude and gold were flat at $90.65 a barrel and $1,662.26/oz, respectively.

The rand lost ground against the strong dollar, trading at R17.71/$. The rand is down 11.08% against the dollar so far in 2022.

The local bourse surrendered most of its gains on Tuesday but halted a five-session slide that dragged the all share index to a two-week low. The all share recovered 0.19% to settle at 66,602.84, after earlier gaining as much as 1.45%.

Sasfin will release its 2022 results on Wednesday.

At 10am, investors will dissect the latest consumer price index (CPI) figures from Stats SA. The consensus is for year-on-year inflation rate to have moderated from 7.8% in July to 7.5% in August.

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Source: businesslive.co.za