JSE faces lower Asian markets after Wall Street’s losses
It is red across the board from Asia at the start of the week for the JSE as US markets ended lower on Friday while traders wait to see what China announces this week during the 20th National Congress of the Chinese Communist Party (CCP) being held in Beijing.
The Nikkei in Japan fell 1.39%, the Hang Seng in Hong Kong 1.13% and the Shanghai composite in mainland China 0.10%. Year to date, the Hang Seng is down by more than a quarter (27.21%), the Shanghai composite 15.51% and the Nikkei 8.82%.
Tencent, which influences the JSE via Naspers, fell 2.65% and is down 46.54% this year.
Japanese stocks tracked lower US markets from Friday as traders fear another interest rate hike by the US Federal Reserve could lead to a worldwide recession.
“The market is fully pricing a 75 basis points hike from the Fed next month and a slightly better-than-even chance of a follow-up 75 basis points hike in December,” National Australia Bank currency strategist Rodrigo Catril wrote in a note.
Meanwhile, President Xi Jinping did not indicate that mainland China plans to end its zero-Covid-19 policy during his address at the CCP’s congress on Sunday. He said the policy had achieved its aim along with economic development.
US markets fell on Friday as the Dow Jones ended 1.34% lower, the S&P 500 2.37% and the Nasdaq 3.08%. The Nasdaq has lost over a third of its value so far this year (34.81%), the S&P 500 more than a quarter (25.30%) and the Dow Jones almost a fifth (19.00%).
In local market news, the JSE closed marginally weaker on Friday, giving up gains from earlier in the session as investors digested new inflation expectations in the US. The all share lost 0.19% to 64,271 points and the top 40 0.2%.
A consumer survey from the University of Michigan showed expectations for elevated inflation were increasing. The survey is closely watched by the US Fed and could mean more aggressive interest rate hikes will remain in place for longer.
The dollar strengthened 0.25% against the rand to R18.31. The greenback has gained 14.79% against the rand so far this year.
In commodities, the price of Brent crude is up by 0.54% to $92.13 a barrel, gold 0.45% to $1,649.17/oz and platinum 0.48% to $903.00.
On Monday, affordable housing developer Calgro M3 will release its interim results. No economic data is expected.
Calgro M3 said last month that it expects half-year earnings to rise by as much as 43% as the housing and memorial parks developer ramps up the completion of several residential projects that are due to be handed over within the next four months.
Source: businesslive.co.za