Global risk-off trade pummels JSE lower
All share closes weaker for eighth session running in a jittery market
The JSE all share closed in the red for the eighth session running on Thursday as indications that the global equity rout might be contained fizzled out in late trade.
The Dow opened firmer, but soon turned weaker again with the global sell-off gathering renewed pace.
The latest market jitters relate to concern in the US that companies are already struggling with higher input costs following the eight US Federal Reserve interest-rate hikes since 2015.
"Markets and the rand are at the mercy of foreign events and risk sentiment," said TreasuryOne analyst Gerard van der Westhuizen.
The JSE all share last saw positive territory on October 1, when it gained a marginal 0.15%. Barring that session, the all share has closed in the red for 12 sessions since September 25.
The all share closed 1.11% lower at 52,229.30 points, bringing losses for the year to 12.23%.
Tech stocks were sold off heavily over the past few days. Local heavyweight Naspers was a major casualty in the past few weeks as Chinese internet company Tencent continued to trade at 12-month lows, with little sign of any improvement soon.
But in a remarkable turnaround on Thursday, Naspers closed 0.91% higher at R2,681.29, the first positive close in eight sessions. It is 22% lower year to date.
The rise of US bond yields as the trade war between the US and China escalates has spooked the markets. It is feared that the hawkish Fed may choke off growth prospects with further hikes.
But deVere group analyst Nigel Green said the major sell-off would not have taken most investors by total surprise. "With rising interest rates, a contracting labour market and rising oil prices a readjustment was to be only a matter of time," he said.
There was renewed inflation concern on Thursday as the US consumer price index (CPI) rose 2.3% in September from 2.7% in August and 2.9% in July.
The Dow resumed its weakening trend in early evening trade on Thursday, weakening 0.62%, after dropping 3% on Wednesday.