JSE to contend with weaker Asian markets in Friday, after a rough September

The JSE looks set to contend with weaker Asian markets on Friday morning, coming off its worst month of 2020 in September, when markets were roiled by a rise in inflation concerns, as well as political risk factors.

Chinese regulatory interventions, some resulting in rolling blackouts, the US political landscape and concerns about the potential collapse of Chinese property giant Evergrande made for an interesting September, when the local bourse gave back 4%.

Concerns that supply-chain disruptions and rising energy costs will push up inflation also weighed on market sentiment, though central banks have sought to play this down and temper expectations.

In the US, a deal funding the government until December 3 was passed, easing concerns about a federal government shutdown.

“Kicking the can down the road didn’t save Wall Street, where equities slumped into the quarter’s end,” said Oanda senior market analyst Jeffrey Halley in a note.

A bid to get a vote on a huge infrastructure bill in the US Congress did not proceed on Thursday, though negotiations are expected to continue on Friday.

Local stocks, including hospitality stocks, may however benefit from SA’s move to level 1 restrictions, announced by President Cyril Ramaphosa on Thursday night.

Under adjusted level 1, the curfew will begin at midnight and end at 4am. Curbs on alcohol sales have been scrapped except for a prohibition on sales after 11pm. The size of indoor gatherings will be increased from 250 to 750, while outdoor gatherings will increase from 500 to 2,000, provided social distancing is maintained.

Exchanges in mainland China and Hong Kong are closed on Friday for the Golden Week holiday, which last until next Thursday.

In morning trade Japan’s Nikkei was down 2.56%.

Gold was down 0.16% to $1,752.60/oz while platinum had lost 0.17% to $959.70/oz. Brent crude had fallen 0.14% to $78.22 barrel.

The rand had weakened 0.17% to $15.09/$.

There is little on the local corporate calendar on Friday.

gernetzkyk@businesslive.co.za