JSE faces lower Asian markets and stronger dollar
The greenback breached the R18/$ mark again
The JSE will open to Asian markets in the red again on Wednesday morning as traders wait to see if many countries raising their interest rates last week will tame inflation and stave off a recession.
The Hang Seng in Hong Kong declined by 2.34%, the Nikkei in Japan by 2.26% and the Shanghai Composite 0.75%.
The Hang Seng dipped to its lowest point in 13-years at one point in morning trade as traders await what the impact of interest rate hikes will be.
In Japan, the Nikkei was down in part because of what happened in US markets overnight and companies becoming concerned about the impact of a weaker yen on its profits, particularly ones that rely on exports.
The markets in mainland China are still digesting the World Bank downgrading its economic growth forecast from 4.3% to 2.8% in 2022, noting ongoing Covid-19 disruptions and risks in the property sector such as unsustainable debt levels.
The Nasdaq gained 0.25% overnight while the Dow Jones and S&P 500 increased by 0.43% and 0.21%, respectively.
“A partial reversal of much of yesterday’s price moves and signs of an improving risk appetite over the Asian session couldn’t hold on amid hawkish Fed speak, US data continuing to point to resilience and as focus remained on the implications of the UK’s fiscal plan,” National Bank of Australia (NAB) economist Taylor Nugent said in a note on Wednesday.
Tencent, which influences the JSE via Naspers, dropped by 1.71%.
On Tuesday, the JSE took its cue from firmer opening on US markets after optimistic comments from the Federal Reserve officials on Tuesday at the Barclays-CEPR International Policy Forum. The JSE all share gained 0.63% to 64,025 points and the top 40 added 0.58%, while European markets closed weaker after spending most of the day in positive territory.
The dollar is on the rise again as traders look for relatively safe investments amid global volatility. The greenback was up 0.71% on Wednesday morning, breaching the R18/$ mark, as it traded at R18.15/$.
In terms of commodities, Brent crude, platinum and gold all fell. Brent crude dipped by 1.39%, platinum by 0.70% and gold by 0.24% to $85.07 a barrel, $842.39 and $1,624.83/oz, respectively.
Healthcare group Ascendis and technology group Alviva are expected to top the corporate news headlines on Wednesday when they release their annual results.
Ascendis, who said in July it wants to raise R100m by issuing new shares, expects its headline loss to improve by about two-thirds. Alviva said earlier it sees its headline earnings jumping by about three-quarters.
On the economic side of things, Stats SA will publish the tourism accommodation figures for July at 10am and BankservAfrica will release its Take-home Pay Index (BTPI) for August.