JSE to contend with mixed Asian markets on Friday as recession concerns persist

The JSE looks set to open to Asian markets that are struggling for direction on Friday morning, with investors still contemplating the threat of rapidly rising interest rates pushing major economies into recession.

The US Federal Reserve had delivered a 75 basis point interest rate hike on Wednesday night, which had been priced in by the market, but any positivity had fizzled on Thursday, when the S&P 500 fell more than 3%.

The post-Fed rally in equities ran out of steam within 24 hours with Wall Street plummeting overnight once again, said Oanda senior market analyst Jeffrey Halley in a note.

“My overall take on the state of play for markets at the moment is that even the most ardent buy-the-dipper in the equity space is starting to realise inflation is a threat, with central banks prepared to hike the world into a slowdown and possible recession to get on top of it,” said Halley.

SA markets were closed on Thursday for a public holiday, but had risen 2.77% on Wednesday, snapping a six-session losing streak.

In morning trade on Friday the Hang Seng was up 0.76%, while Japan’s Nikkei had fallen 1.77% and the Shanghai Composite was flat.

Tencent was up 0.33%, and can influence the JSE via the Naspers stable.

Gold had fallen 0.74% to $1,843.75/oz while platinum was down 0.63% at $963. Brent crude was 0.13% higher at $119.02 a barrel.

The rand was little changed, hovering at R16/$, having weakened almost 1.4% on Thursday.

The local corporate and economic calendars are bare on Friday.

gernetzkyk@businesslive.co.za