JSE set for rebound after Monday’s global selloff

The JSE was firmer on Tuesday morning, on track to reverse Monday losses that saw the local bourse drop the most since the Covid-19 pandemic hit.

Still, investors appeared unsettled in light of the uncertainty about the extent to which the US Federal Reserve was likely to increase interest rates to fight runaway inflation. Rising geopolitical tension fuelled by the conflict between Russia and Ukraine also undermined risk appetite.

At 9.50am, the JSE all share had gained 0.99% to 72,879.43 points and the top 40 1.07%. Precious metals had added 2.09%, resources 1.95%, industrial metals 1.78%, industrials 0.5%, banks 0.49% and financials 0.46%.

Earlier in Asia, the Shanghai Composite fell 2.58%, Hong Kong’s Hang Seng 2.28% and Japan’s Nikkei 1.66%.

The Reserve Bank is widely expected to lift rates 25 basis points when its monetary policy committee wraps up its policy meeting on Thursday. The Fed ends its policy meeting on Wednesday.

“It could be a make or break week for the markets, with the Fed meeting on Wednesday, big tech earnings, and ongoing tensions on the Ukraine-Russia border,” said Craig Erlam, senior market analyst at Oanda.

“That may sound a bit over the top given how deep a correction we’ve already seen, particularly in the Nasdaq, but it could get much worse before it gets better.”

Erlam said the Fed needed to strike the right balance between taking inflation seriously and not wanting to cause further unnecessary turmoil in the markets.

The rand, which often acts as a barometer of sentiment towards emerging markets, has been resilient against the dollar, though it was caught up in the selling frenzy on Monday.

At 9.26am, the rand had weakened 0.66% to R15.3435/$, 0.59% to R17.3618/€ and 0.58% to R20.6794/£. The euro was unchanged at $1.1315.

Gold lost 0.12% to $1,841.18/oz and platinum 1.08% to $1,020.81/oz. Brent crude was 0.13% weaker at $86.91 a barrel.

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