The JSE looks set to contend with continued global risk aversion on Monday morning, with Asian markets lower as investors consider the growing risks posed by Covid-19 in China and central bank policy.
Last week was a roller coaster for stocks, with the JSE slipping 2.5% on Friday amid concerns that rapidly rising interest rates may push major global economies into recession.
The US Federal Reserve had delivered on a 50 basis point hike increase on Wednesday, signalling two more are on the way, while the Bank of England had indicated it expects a mild recession in 2023.
Questions about the ability of central banks to lean against inflation remain a significant source of angst as investors weigh greater near-term policy certainty vs medium-term inflation uncertainty, said SPI Asset Management managing partner Stephen Innes in a note.
“The longer this goes on, it will drive even higher investor anxiety levels and pressure stocks lower,” he said.
In morning trade on Monday, Japan’s nikkei fell 2.12% and Australia’s all ordinaries index 1.33%, while the Shanghai composite was flat.
Markets in Hong Kong are closed for a public holiday.
Gold was down 0.44% to $1,875.49/oz while platinum lost 1.11% to $951. Brent crude was flat at $112.59 a barrel.
The rand was 0.7% weaker at R16.12/$.
There is little on the local corporate or economic calendar on Monday in terms of releases, but the Mining Indaba begins in Cape Town, with mineral resources & energy minister Gwede Mantashe set to give an address.