JSE faces mixed Asian markets at start of last quarter amid flat dollar

The JSE is facing mixed Asian markets at the start of the new month as traders try to wade through the market volatility brought on largely by war in Ukraine, high inflation and interest rate hikes as the dollar remains a safe investment, gaining 13.33% against the rand so far in 2022.

The Nikkei in Japan gained 0.62% while the Hang Seng in Hong Kong dipped 1.19% and the Shanghai composite in mainland China was 0.55% lower.

The Nikkei was heading to its lowest level since March before recovering despite weaker economic data.

Hong Kong markets were lower as they followed Wall Street trends, while retail sales edged down and growth slowed.

The Golden Week holiday, which commemorates the founding of the People’s Republic of China in 1949, continues this week despite the strict zero-Covid-19 policy in the world’s second-largest economy.

Year to date, the Nikkei is down 8.27%, the Shanghai composite 15.81% and the Hang Seng 29.2%.

In US markets, the Dow Jones closed 1.71% down on Friday and the S&P 500 and the Nasdaq both fell 1.51%.

Tencent, which influences the JSE via Naspers, slid back 2.25% on Monday morning.

The JSE closed firmer amid mixed global peers on Friday, as markets attempted to rebound, wrapping up another brutal month and third quarter amid recessionary fears. The local bourse closed 0.73% firmer at 63,726 points, supported by gains in most major indices, but sentiment remains fragile amid quarter-end portfolio rebalancing.

The dollar continued to hover around R18/$ as it remained flat, trading at R18.05.

It was green screens for Brent crude, gold and platinum. Brent crude was up 2.45%, trading at $87.23 a barrel. Gold and platinum ticked up slightly as they increased 0.24% and 0.19%, respectively. Gold was $1,663.71/oz and platinum $860.66/oz.

Little corporate news is expected on Monday, but some action is expected on the economics side. Absa’s latest purchasing managers index (PMI) is likely to show how SA’s manufacturing and service sectors managed frequent load-shedding and growth slowing at SA’s trading partners.

North West University’s Business School will release the policy uncertainty index (PUI) for the third quarter. The PUI reached its highest level since 2016 in the second quarter, mainly driven by heightened global economic unpredictability arising from the Russia-Ukraine war.

This was further reinforced by domestic issues including load-shedding problems, escalating food and fuel prices, the economic damage from the floods in KwaZulu-Natal, continued local government delivery failures, and progressively higher borrowing costs for business and consumers.

gousn@businesslive.co.za