Picture: ISTOCK
Picture: ISTOCK

Risk aversion looks set to return to global markets, after North Korea launched another missile in the direction of Japan on Friday.

Global bourses had staged a recovery this week, as a feared missile test last weekend did not take place and investors began returning to riskier assets, but Asian markets were slightly lower ahead of the JSE’s opening on Friday morning.

Local and global economic news has weighed on the JSE in the latter part of this week, sending the bourse lower on Wednesday and Thursday, after positive closes on both Monday and Tuesday. Corporate results have been mixed this week.

With little local economic or corporate news scheduled for Friday, the JSE is likely to take its cue from international developments.

Gold edged up on Friday morning after the North Korean nuclear test, which could boost the JSE’s miners. The metal had a strong run as a safe haven last week, on concern about Pyongyang’s increasing aggression.

But the metal faces a tussle, with a resurgent dollar limiting its safe-haven gains. A strong dollar makes the metal more expensive for buyers holding other currencies.

The dollar was boosted on Thursday by US consumer inflation data that came in higher than expected. The year-on-year rate of 1.9% increased the likelihood that the US Federal Reserve will raise interest rates before the year is out. The Fed’s inflation target is 2%.

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