JSE looks set for slump as rand approaches R17/$
Slumping Asian markets bode ill for the JSE on Monday morning, with all eyes on the coronavirus outbreak, as well as a plunging oil price due to a dispute between Russia and Saudi Arabia.
In risk-off trade, the rand crashed 3.38% to R16.9210/$, having earlier fallen to R16.996. This has put the local currency at a four-year low.
The collapse of talks between Opec and Russia over production cuts on Friday sent oil prices plunging on speculation Saudi Arabia is scrapping a strategy of supporting prices in favour of a grab for market share.
Oil crashed further when this was confirmed by Saudi Arabia slashing prices at the weekend.
In morning trade on Monday, Brent crude fell 29.51% to $32.11 a barrel. Gold was down 0.43% to $1,666.80/oz while platinum was down 2.89% to $874.20.
“Complete pandemonium at the open as investors wake up shell shocked to the realisation that last night’s risk meltdown nightmare wasn’t just a bad dream,” said AxiCorp chief market strategist Stephen Innes in a note.
In morning trade on Monday, the Hang Seng was down 3.5% and Japan’s Nikkei 5.32%.
Tencent, which influences the JSE via its largest shareholder Naspers, had lost 3.23%.
There are no local economic releases on Monday, while global data releases are likely to be sidelined due to the threats of the oil price war and the coronavirus outbreak.
“In this environment, data will have little effect on currency markets as moves as big as 10% were witnessed in the overnight session,” Peregrine Treasury Solutions corporate treasury manager Bianca Botes said in a note.
Documents storage company Metrofile is expected to report a rise in profit for its six months to end-December later in the day, but has not provided guidance on why this is the case.
Source: businesslive.co.za