JSE extends losses in line with global markets

The JSE extended losses on Monday, signalling a mild global risk-off, as investors paused to reflect on the year ahead after piling back into shares rather aggressively in the final month of 2023.

The JSE all-share index was off 1.04% to 73,712 points at noon, weighed down primarily by commodity-linked shares amid the broad retreat in underlying commodity prices.

The resource 10 index, made up of stocks such as Anglo American and Sasol, was down 2.31%

The local share market has had a fairly torrid start to the year, with the all-share index losing a hefty 4.7% since last week, though trading volumes were light because of the holidays.

The sharp pullback is in line with global equities, suggesting that irrational exuberance may have informed the surge in November-December when the US Federal Reserve indicated that it may cut interest rates by 75 basis points in 2024.

The long-awaited pivot in monetary policy in the world’s largest economy is expected to boost global growth. Risk assets tend to well in the low rates environment. But last week’s release of the minutes of the Fed’s most recent meeting punctured market optimism about rate cuts. Fed chair Jerome Powell has said consistently said the Fed’s decisions would be guided by the totality of data.

Europe’s leading markets were weaker at midday, with the UK’s FTSE 100 losing 0.59% and France’s CAC 40% dropping 0.49%.

The rand, which is a proxy of global risk on-off sentiment, was 0.21% softer at R18.7140/$.

Brent crude was off 1.15% at $77.84 per barrel while gold fell 0.8% to $2,029.01oz.

mahlangua@businesslive.co.za