JSE faces continued Asian market pressure on Monday

The JSE looks set to contend with continued global risk aversion on Monday morning, with Asian markets lower as investors consider the growing risks posed by Covid-19 in China and central bank policy.

Last week was a roller coaster for stocks, with the JSE slipping 2.5% on Friday amid concerns that rapidly rising interest rates may push major global economies into recession.

The US Federal Reserve had delivered on a 50 basis point hike increase on Wednesday, signalling two more are on the way, while the Bank of England had indicated it expects a mild recession in 2023.

Questions about the ability of central banks to lean against inflation remain a significant source of angst as investors weigh greater near-term policy certainty vs medium-term inflation uncertainty, said SPI Asset Management managing partner Stephen Innes in a note.

“The longer this goes on, it will drive even higher investor anxiety levels and pressure stocks lower,” he said.

In morning trade on Monday, Japan's nikkei fell 2.12% and Australia's all ordinaries index 1.33%, while the Shanghai composite was flat.

Markets in Hong Kong are closed for a public holiday.

Gold was down 0.44% to $1,875.49/oz while platinum lost 1.11% to $951. Brent crude was flat at $112.59 a barrel.

The rand was 0.7% weaker at R16.12/$.

There is little on the local corporate or economic calendar on Monday in terms of releases, but the Mining Indaba begins in Cape Town, with mineral resources & energy minister Gwede Mantashe set to give an address.

gernetzkyk@businesslive.co.za