JSE weaker as traders watch Middle East developments

The JSE was weaker on Monday morning, while global peers were mixed as investors paid close attention to the developments between Israel and Iran.

Iran launched drones and missiles at Israel on Saturday night, marking the first direct attack on Israel from Iranian territory. While most strikes were intercepted, there was still concern that Israel would retaliate, reported Bloomberg.

If Israel does retaliate, this could be the biggest escalation of tension in the region since the outbreak of the Israel-Hamas war in October 2023.

The brewing geopolitical threats saw the price of Brent crude rise to the highest level since October on Friday at $92.14 a barrel. At 10.30am local time on Monday, Brent Crude was 0.14% weaker at $89.44 a barrel, having touched an intraday high of $90.62.

The geopolitical tension, coupled with recent US inflation reports last week, added another layer of concern about stubborn inflation that has put pressure on the market and the interest rate outlook.

“Market sentiment starts the week on the back foot following the retaliatory attack by Iran on Israel over the weekend,” said Citadel Global director Bianca Botes. “Fears are increasing that there will be a rapid escalation in conflict in the region.”

At 10.35am, the JSE all share had lost 0.62% to 74,846.9 points and the top 40 0.7%. Banks had added 1.12%, food producers 0.79% and financials 0.75%. Precious metals had fallen 4%, resources 2.69%, industrial metals 0.72% and industrials 0.31%.  

At the same time in Europe, France’s CAC 40 had firmed 0.61% and Germany’s DAX 0.85%.

Earlier in Asia, the Shanghai Composite added 1.26%, while Hong Kong’s Hang Seng lost 0.68% and Japan’s Nikkei 0.74%. 

At 10.43am, the rand had weakened 0.3% to R18.9140/$, 0.41% to R20.1529/€ and 0.64% to R23.6001/£. The euro was 0.15% firmer at $1.0655.

Gold gained 0.35% to $2,351.54/oz, while platinum lost 0.86% to $966.83/oz. 

tsobol@businesslive.co.za