JSE to contend with mixed Asian markets on Friday, as oil falls below $100

The JSE looks set for a mixed session on Friday morning, with a fall in energy prices helping to ease inflation concerns a little, even as investors consider hawkish noises from central banks this week.

The local bourse has not had a positive session so far this week, and will need to add about 2,000 points, or more than 2.5%, to close where it did last Friday.

Both the US Federal Reserve and European Central Bank have signalled a need to act more aggressively to rein in rising inflation, while investors have also been considering the prospect of further sanctions against Russia, as well as China’s Covid-19 outbreak.

Oil, however, briefly dipped below $100 a barrel on Thursday for the first time in about three weeks, while on Friday morning it had lost 1.5% to $99.71 a barrel. Investors were digesting news International Energy Agency members had agreed to release 60-million barrels in reserves in coming months in a bid to ease concerns over supply disruptions. This comes on top of plans by the US, announced last week, to release 180-million barrels.

Europe’s move to sanction Russian coal had a muted effect on energy prices, and was expected, while in Asia, focus remains on the extended lockdown in Shanghai, given case numbers are soaring.

A serious spread outside its finance and commercial hub to other large cities will be a big headwind for China’s growth, China stocks, and by default eventually, much of Asia, said Oanda senior market analyst Jeffrey Halley in a note.

In morning trade Asian stocks were mixed, with Australia’s All Ordinaries index up 0.6%, while the Hang Seng had fallen 0.57%. Both the Shanghai Composite and Japan’s Nikkei were flat.

Gold had slipped 0.11% to $1,929.50/oz while platinum was little changed at $962.

The rand was 0.21% weaker at R14.75/$.

The local economic calendar is bare on Friday, as is the corporate calendar.

gernetzkyk@businesslive.co.za