A man looks at an electronic board showing the Nikkei stock index outside a brokerage in Tokyo, Japan, in this file photograph. Picture: REUTERS/KIM KYUNG-HOON
A man looks at an electronic board showing the Nikkei stock index outside a brokerage in Tokyo, Japan, in this file photograph. Picture: REUTERS/KIM KYUNG-HOON

The JSE could follow global stocks firmly lower on Monday morning, as mounting concern about the health of major economies takes its toll on equity markets.

Hong Kong’s Hang Seng Index was 1.8% lower at the lunch break, with Tencent down as much as 2.8%. That suggests a weak start for JSE-heavyweight Naspers, which owns 31% of the technology group.

Japan’s Nikkei 225 index was 3.3% weaker, while Australia’s main index was down 1.2%. JSE-listed BHP Group fell 1.6% in that market by mid-afternoon.

On Friday, the S&P 500 Index dropped 1.9% in the US after the yield curve in that country inverted. The spread between three-month Treasury bill rates and 10-year notes turned negative for the first time in more than a decade — stoking concerns that the US is headed for a recession.

The US Federal Reserve added to growth concerns last week with a decidedly dovish tone, while weak economic data out of Europe also underwhelmed investors.

No major company results are expected on the JSE on Monday.

Small-cap Randgold & Exploration Company is due to report its financial results for the year ended December.

The company said earlier in March its headline earnings per share will be 2.6c-7.1c for the year, from a headline loss per share of 22.54c previously.

The turnaround was mainly due to a settlement payment received from Charles Orbach and Company, a former auditor of the group.

Meanwhile, the rand was weaker on Monday morning, trading 0.22% down versus the dollar at R14.52/$.

The local currency was flat against the pound at R19.16/£, and versus the euro it was 0.19% down at R16.41/€.

“While Eskom has suspended load shedding, global growth concerns, confirmed by weak EU and US data, is driving market participants to safe-haven assets,” said Bianca Botes, corporate treasury manager at Peregrine Treasury Solutions.

hedleyn@businesslive.co.za