JSE faces weaker Asian markets on Friday amid taper talk and Delta concerns

The JSE looks set to face another torrid session on Asian markets, as investors grapple with the concern about the Delta variant, even as the US Federal Reserve begins thinking about tapering monetary policy.

Fed minutes indicated this week that most policymakers want to start paring back bond purchases sooner rather than the later, pointing to policy changes in coming months, which comes even as countries around the world deal with the threat of the more transmissible Delta variant of Covid-19.

“Perhaps the best one can say is that the minutes were the straw that broke the camel’s back,” said National Australia Bank analyst Rodrigo Catril in a note.

“Instead we would attribute heightening concerns over the global growth outlook as the main cause for the turn in sentiment,” he said.

This followed recent softer-than-expected Chinese economic data along with lockdowns and restrictions around the globe due to a rise in Delta infections. China’s regulatory and credit tightening drive has not helped either, said Catril.

In morning trade the Hang Seng was down 2.33%, the Shanghai Composite 1.66% and Japan’s Nikkei 0.71%.

Tencent, which gives direction to the JSE via the Naspers stable, had fallen 0.14%.

Gold was 0.32% higher at $1,785.96/oz while platinum had risen 1.06% to $983.27. Brent crude was 0.45% higher at $66.82 a barrel.

The rand was flat at R15.19/$, having weakened 1.5% on Thursday, breaching R15/$ for the first time since March.

The local bourse lost 2.64% on Thursday, its worst day in about 10 months.

In corporate news on Friday Standard Bank is due to announce a strategic update later, having reported headline earnings rose by more than half in its six months to end-June on Thursday.

KAP Industrial is due to report its results for the year to end-June later, saying in a recent trading update that it expects headline earnings per share (HEPS) to more than double.

gernetzkyk@businesslive.co.za