JSE could be in store for difficult session on Friday after Wall Street tumble

The JSE could be set for another tough day on Friday, with Asian markets down significantly after US stocks had their worst day since 2020.

The Federal Reserve’s announcement on Wednesday that it was not planning on 75 basis points interest rates hikes had initially supported sentiment, as this had been partially priced in, but there was a sharp reversal on Thursday as Wall Street opened.

The tech-heavy Nasdaq fared worst, falling almost 5%, while in morning trade on Friday the Hang Seng had fallen 3.87%, and the Shanghai Composite 2.32%.

Tencent, which can influence the direction of the JSE via Naspers, was down 4.53%.

With no obvious news flow to explain the sharp reversal, it seems instead that the relief of Fed chair Jerome Powell indicating 75 basis points moves were likely a step too far and gave way to a renewed focus on high inflation and a challenging growth outlook, said National Australia Bank economist Taylor Nugent in a note.

There are concerns that sharply rising interest rates globally may push many countries into recession.

The Bank of England had raised interest rates by 25 basis points on Thursday, as expected, but some policymakers were in favour of 50 basis points, and the bank had warned of tough economic conditions in the months ahead.

The rand was 0.43% weaker at R16.04/$ on Friday morning, having slumped 3.37% on Thursday, 

Gold was flat at $1,876.50/oz while platinum had lost 2.72% to $956. Brent crude was up 0.32% to $111.32 a barrel.

There is little on SA’s corporate or economic calendar on Friday, with stage 2 load-shedding expected to continue over the weekend.

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