JSE likely to fall on Monday as Shanghai composite loses 8%

A slump by Shanghai’s composite index on Monday morning does not bode well for the JSE, as concerns over the growing extent of the coronavirus outbreak continue to grip investor sentiment.

Travel restrictions and business shutdowns in the world’s second-largest economy are raising doubts about global growth prospects in the next months.

The markets continue to view the Wuhan virus through the lens of the [severe acute respiratory syndrome] epidemic of 2002-03,” said AxiTrader chief markets strategist Stephen Innes in a note.

“Still, given the importance of China in the global supply chain 2020 vs 2003, the risk might be that the market is not alarmist enough,” Innes said.

Shanghai’s composite plummeted 8.13% on Monday morning, its worst-one day performance since August 2015.

Tencent, which influences its largest shareholder, Naspers, rose 1.6%.

The rand was a little weaker, remaining just below the psychologically important R15 a dollar level.

Gold was 0.57% weaker at $1,58066 an ounce while platinum fell 0.75% to $959.23 an ounce. Brent crude was 0.99% softer at $56.08 a barrel.

Locally, load-shedding is expected to continue until Thursday, but the news regarding the virus outbreak is expected to hog the spotlight.

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Source: businesslive.co.za