JSE. Picture: MICHAEL ETTERSHANK
JSE. Picture: MICHAEL ETTERSHANK

The JSE could be under pressure on Thursday morning, with risk sentiment fragile as investors consider the implications of the Covid-19 outbreak.

US markets fell sharply overnight, with the Dow Jones index and tech-heavy Nasdaq falling more than 4%, amid a generally poor start to the fourth quarter as investors sought safe-haven assets, such as US treasuries.

There’s little doubt that Covid-19-related news has been responsible for the poor start to the quarter, including a now much more sombre warning from US President Trump that there could be as many as 240,000 US deaths just in the coming weeks, said National Australia Bank analyst Ray Attrill in a note.

There have also been claims by US intelligence that China has concealed the true extent of the epidemic inside China, and whether this was true or not, the question remained whether the economic effects of the virus had been adequately priced in by markets, he said.

In morning trade on Thursday the Australian all ordinaries index has fallen 1.5% and Japan’s Nikkei 0.52%, while the Shanghai Composite had risen 0.3%.

Tenent, which influences the JSE via major shareholder Naspers, had inched up 0.16%.

Gold was down 0.54% to $1,583.31/oz while platinum was down 0.33% to $716.33. Brent crude was up 2.47% to $26.71 a barrel.

The rand was little changed at R18.22/$, plumbing record lows.

The rand continued to trade in wide margins, and pressure on the local currency was expected to continue, said Peregrine Treasury Solutions corporate treasury manager Bianca Botes in a note.

Meanwhile, International Monetary Fund (IMF) and World Bank funding is rapidly becoming a reality, as finance minister Tito Mboweni has met with other African finance ministers via video conference to discuss the potential of this approach in helping Africa to fight the coronavirus crisis, said Botes.

gernetzkyk@businesslive.co.za