JSE remains in the throes of a sell-off as oil drops to $65
A falling oil price is boosting the dollar and drying up global liquidity, analysts say, while the JSE posts broad-based losses, led by retailers
The JSE fell more than 1% on Wednesday morning, faltering amid a host of risk events, and a falling oil price. At 9.30am the all share was down 0.96% to 51,610.2 points and the top 40 had lost 1%. General retailers were down 1.69%, food and drug retailers 1.39%, resources 1.29% banks 1.06% and industrials 0.9%. Oil has eased back to $65 a barrel, which analysts said was putting the wind in the dollar’s sails due to decreasing global liquidity. As oil-producing countries generally recycle dollars back into the global financial system, falling prices reduce liquidity and boost the greenback, said Nedbank Corporate and Investment Banking strategists Mehul Daya and Neels Heyneke in a note. Assuming a fair value of $58 a barrel, this would imply a 3% appreciation of the dollar, which would bring the rand to about R15/$, they said. Losses on the JSE were broad based, with general retailers and miners faring worst. US markets failed to rebound on Tuesday, following a sharp sell-off of tech...
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