JSE set for another day of pressure amid recession fears
The global equity sell-off looks set to continue on Thursday, with Asian markets under serious pressure as global bond markets flash recession warnings.
Investors have piled into safe longer-term government bonds, pushing the yields on these debt assets below shorter-dated debt, widely seen as a sign that loose monetary policy and weak economic conditions are looming.
A spate of downbeat global economic data prompted a 3% sell-off for the Dow on Wednesday, as investors face up to the prospect of a synchronised global economic downturn.
The JSE fell 2% to its worst level since February, while the rand is near an 11-month low.
“I think Asia traders are a bit shellshocked by the extent of the carnage overnight and not sure what to do with themselves today,” said Vanguard Markets managing partner Stephen Innes in a note. “However, trade volumes speak louder than words and those volumes are screaming bear.”
The rand was recovering slightly in morning trade, trading 0.3% firmer at R15.3674/$ at 6.30am.
Chinese media giant Tencent was trading about 3% lower, and market heavyweight Naspers had suffered a similar loss on Wednesday.
Global focus is expected to remain on economic data, with UK and US retail sales data for July on the agenda. US industrial production data for the same month is also due.
The corporate calendar is reasonably light, with property group Resilient and hotel operator City Lodge set to report.
Resilient has not issued a trading statement, but City Lodge said earlier in August it expected to report that headline earnings per share for the year to end-June was expected to fall by between 17% and 22%.
Source: businesslive.co.za
