JSE faces global market caution on Monday
The JSE must contend with mixed Asian markets on Monday morning, with much attention on the oil price, which is under pressure from the concern that a lack of demand could result in a shortage of storage space.
The price of oil futures has fallen sharply and there is the prospect that producers may soon pay customers to take oil off their hands, Bloomberg reported.
On the other hand, US producers are slowing production and the oil price could find support this week as Russia and Saudi Arabia have issued a joint statement hinting at more production cuts, AxiCorp chief global markets strategist Stephen Innes said in a note.
Asian markets were mixed on Monday morning, with the Shanghai composite up 0.3%, while Japan’s Nikkei had fallen 0.8%.
Tencent, which influences the JSE via Naspers, its largest shareholder, was flat.
Earlier, China’s central bank cut its loan prime rates, though the cuts were telegraphed via the repo market last week. This is the continuation of a trend of cautious and targeted stimulus by China, rather than the blanket programmes of the past, Oanda analyst Jeffrey Halley said in a note.
Brent crude was 1.98% lower at $27.74 a barrel, having fallen almost 60% so far in 2020.
Gold was flat at $1,683.50/oz while platinum was up 1.13% to $780.44.
The rand was 0.3% weaker at R18.79/$.
There is little on the local corporate and economic calendar on Monday, and SA markets are expected to get direction from global developments. Statistics related to the Covid-19 pandemic will be closely watched, while there is also an expectation that further stimulus measures could be announced in the US this week.
Source: businesslive.co.za
