JSE faces mixed Asian market as Opec overshadows global markets

The JSE is facing mixed Asian markets on Thursday as the news that Opec+ agreed to make a large cut in oil production to keep prices high dominated global markets.

The Nikkei in Japan gained 0.91%, while the Hang Seng in Hong Kong dropped by 0.43%. The Shanghai composite remains closed as China celebrates its Golden Week holiday. Year to date, the Nikkei is down 6.61%, the Hang Seng 22.62% and the Shanghai composite 16.74%.

The Japanese market increased for the fourth straight session as it went against the grain of global-market sentiment. Meanwhile, concerns about further interest-rate hikes from the US Federal Reserve increased again after new economic data from the US beat expectations, but Japanese energy firms benefited from higher oil prices after the news about Opec+.

The market in Hong Kong was partly down, because of the lower reading of the latest PMI figures from S&P Global for the region as it fell from 51.2 in August to 48 in September. A recent uptick in coronavirus cases weighed on private-sector activity, while output activity dropped for the first time in six months.

Tencent, which influences the JSE via Naspers, slid by 0.43% on Thursday morning.

“Given outdated production baselines, which didn’t account for actual production, which was less than the official figures, the effective oil supply reduction is expected to be about half of the headline number. Nevertheless, it’s still the biggest cut since 2020 and an unwelcome inflationary dynamic to the world’s economy,” National Australia Bank (NAB) currency strategist Rodrigo Catril said in a note on Thursday.

The Nasdaq ended 0.25% lower on Wednesday, followed by the S&P 500 with 0.20% and the Dow Jones 0.14%. The Nasdaq is down 29.59% since the start of 2022, the S&P 500 21.13% and the Dow Jones 17.25%.

On the SA market, the JSE closed weaker on Wednesday with global peers mixed as investors took stock of markets’ strong rebound on Monday and Tuesday. The JSE all share lost 1.06% to 65,612 points and the top 40 1.06%. Precious metals fell 1.45%, resources 1.36%, industrial metals 1.23%, industrial 1.02% and financials 0.73%.

The dollar lost ground against the rand as it declined by 0.55%, trading at R17.74. The greenback has gained 11.21% against the rand so far this year.

It was green screens for commodities as the price of Brent crude, gold and platinum increased. Brent crude is up 0.15% to $93.51 a barrel, gold 0.37% at $1,722.12/oz and platinum 0.49% to $922.99.

Thursday’s corporate calendar is bare. The only economic news expected is Stats SA releasing the number of electricity units produced and consumed in SA in August at 1pm.

gousn@businesslive.co.za