JSE set for cautious start amid mixed Asian signals and rising Covid-19

The JSE is likely to start the week tentatively, given the mixed signals in Asia, where Hong Hong’s Hang Seng index fell 0.55%, but Japan’s Nikkei 225 edged up 0.13%.

The resurgent Covid-19 cases in Europe cast a shadow on global markets, with Austria reimposing full lockdown restrictions, raising concerns whether other countries in the region will follow suit.

Travel and leisure stocks, which are most sensitive to Covid-19 restrictions, fell in Asia.

The JSE, which is hovering near record highs, could edge lower on Monday, with traders using Covid-19 cases as an excuse to take profits. The all share was up 6.5% on a rolling one-month basis, which makes its prone to short-term pullbacks.

The rand steadied against the dollar in early trade at $15.72/$, but remained under considerable pressure on a short-time basis, having lost 7% on a one-month period.

Brent crude edged up 0.14% to $78.54 per barrel, but was near a seven-week low, which bodes well for SA as a net importer of Brent crude.

On Wall Street, S&P 500 and Nasdaq closed at record highs on Friday, while Dow Jones pulled back slightly.

“Stock markets continue to trade at or near record highs in the US, and who can blame them? US data remains strong though the inflation noise gets louder by the day,” said Jeffrey Halley, senior market analyst Oanda.

mahlangua@businesslive.co.za