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The JSE resumed its downward trend on Thursday along with global markets as investors fretted anew over stubbornly high US inflation and the economic toll of aggressive interest rate hikes that may be required to tame it.

The local bourse fell more than 3% in intraday trading, while its European and Asian counterparts recorded losses of as much as 2.24%. Outside the US, signs of weakening growth is battering investor confidence with the war in Ukraine threatening an energy crisis in Europe and lengthening lockdowns in China throw another spanner into supply chain chaos. 

Mixed opening trade in US markets saw the JSE pare its losses, but by 6.29pm the Dow Jones industrial average had fallen 0.85% to 31,561.93 points and the broader S&P 500 was down 0.62%, boding ill for the local market’s next session.   

The all share ended the day 1.7% weaker at 67,251.89 points, while the top 40 shed 1.85%, led by precious metals, resources and industrial metals, which plunged 5.79%, 4.9%, and 4.82%, respectively.

“We’re continuing to see these wild swings in the markets which in many ways sums up the mood at the moment. On the one hand, investors must be looking at the current levels with plenty of temptation given how far equity markets have fallen. On the other, inflation remains a massive problem and the data continues to feed those fears,” said Oanda senior market analyst Craig Erlam.

“The [US inflation] data on Wednesday was really disappointing. We’ve known the peak was coming but investors needed more than confirmation of that. They needed reassuring that not only was it decelerating, but doing so significantly thanks largely to base effects. And it’s safe to say they weren’t particularly reassured,” Erlam added.

In Europe, London’s FTSE 100 closed 1.56% lower, France’s CAC 40 fell 1.14% and Germany’s DAX was down 0.64%. Asian stocks took a bigger beating, with the Hong Kong's Hang Seng sliding 2.24% and Japan's Nikkei shedding 1.77%.

The rand weakened more than 1% intraday to R16.2678/$, but by 6.20pm had recovered slightly to R16.1106/$. The local unit was 1.02% firmer at R16.7232/€ and 0.2% stronger at 19.6603/£, emphasising the strength of the dollar. The euro was 1.24% weaker at $1.0381.

The local currency has lost 10.8% against the dollar on a one-month basis, and it is down 1.19% so far in 2022.

Gold lost 0.96% to $1,834.76/oz and platinum slumped 4.35% to $956.50. Brent crude was 0.43% firmer at $107.42 a barrel.



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