Picture: JSE
Picture: JSE

The JSE is likely to open lower on Friday, after the price of Brent crude fell by 7% in its steepest one-day drop in about 10 months, a move that is expected to hurt stocks such as Sasol and MTN.

The sharp drop is partly due to fresh demand concerns after some of the EU countries reimposed fresh restrictions to restrict the spread of coronavirus.

The dollar was also relatively strong on international markets, after the yields on US treasury note rose to the highest in about a year, triggering a renewed sell-off in the US stocks that some consider to be overbought. The yield on the US treasury note hovered around 1.7064% in early trade.

The rand, which is generally a proxy for emerging markets, seemed to hold its own, however. The local currency weakened just marginally (0.18%) to R14.74/$.

Asian shares were mostly weaker, with Hong Kong’s Hang Seng shedding 1.66% and Japan’s Nikkei 225 index 1.23%.

The JSE all share is likely to open lower as the weaker oil price is expected to take the shine off Sasol, whose shares have had a spectacular rally since their lows around R25 a year ago. They trade at R225 at present, though still off their record peak of about R600.

MTN’s share price is also sensitive to the movement in the oil price because the economy of Nigeria, which is its biggest market, generates its largest chunk of foreign-exchange revenue from oil. 


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