JSE faces weaker Asian markets on Wednesday as recession concerns rise
Markets have been boosted recently by the expectation that slowing economic growth may temper interest rate hikes, but reality is setting in
The JSE faces weaker Asian markets on Wednesday morning, with some dismal US economic data weighing on sentiment and a recent recovery for global markets seemingly running out of steam.
Global stocks had started bouncing back from Friday amid the hope that slowing economic growth will temper the pace of central bank interest rate hikes later in the year, though analysts have noted companies will still have to operate in a tough economic environment.
Weak US consumer confidence and manufacturing data weighed on Wall Street overnight, SPI Asset Management managing partner Stephen Innes said in a note, describing as “arcane logic” that previous weak economic data had boosted equities.
“Readers should probably stop watching US stock markets for economic wisdom, as the price action overnight confirmed that part of the financial world has as little future insight as anywhere else,” he said.
In morning trade the Hang Seng was down 1.68%, Japan’s Nikkei 1.18%, and the Shanghai Composite 0.77%.
Tencent, influential to the JSE due to the Naspers stable, was up 0.16%.
Gold was up 0.11% to $1,821.67/oz while platinum rose 0.49% to $917. Brent crude was down 0.74% to $117.08 a barrel.
The rand was little changed at R16.04/$, having slipped 1.34% on Tuesday, when SA was subjected to stage 6 load-shedding for the first time since 2019.
SA’s corporate calendar is bare on Wednesday, while in economic news the FNB/BER consumer confidence index for the second quarter is due later. The index slipped to negative 13 points in the first quarter, hit by the war in Ukraine, load-shedding and flooding in KwaZulu-Natal. This was its weakest reading since the second quarter of 2021.