JSE likely to follow mixed Asian markets

The JSE may open fairly mixed on Monday given the patchy session in Asia, where Japan’s Nikkei 225 fell 0.35% while Hong Kong’s rose just more than 1%.

Markets appear on balance to have adjusted to the Russia-Ukraine war that has entered its second month, with no end in sight.  

At Friday’s close the SA share market was just 4% below its record high touched in early March, despite intense volatility that followed Russia’s invasion of Ukraine.

The all share was shielded for the most part by mining stocks, which benefited from rising commodity prices amid Western sanctions against Russia, which have raised supply worries.

SA banking stocks have also performed well, though they do not necessarily move the needle in the overall all share index.  The banking index is trading at its highest level since early March.

Brent crude eased slightly to trade at $117 a barrel on Monday morning, as fresh lockdown restrictions to control the spread of Covid-19 in Shanghai, China’s largest city, raised demand concerns.

However, Brent crude has increased by 50% since the start of 2022, prompting central banks to increase interest rates to head off higher inflation.

The rand was slightly weaker at R14.61/$, though it has strengthened by 5% during March due to the elevated prices of the commodities that SA exports.

Elsewhere, the yields on benchmark US treasury notes hovered around 2.53% in early trade, having reached a fresh two-year high on Friday, as the US bond market priced in a tighter monetary policy by the US Federal Reserve.

mahlangua@businesslive.co.za