The JSE was weaker on Monday morning in line with its global peers, as a setback for US President Joe Biden’s economic agenda and fresh Covid-19 lockdowns in Europe weighed on sentiment.
Senator Joe Manchin, a conservative Democrat from West Virginia, has rejected Biden’s $2-trillion package, saying on Sunday he won’t support the Biden administration’s “Build Back Better” plan. Manchin’s decision will likely kill the $1.75-trillion social spending and climate policy bill as it stands now.
Global stocks retreated last week in part on an outlook of diminishing central bank stimulus as officials pivot towards fighting inflation. The US Federal Reserve last week announced a more aggressive plan to wind down its asset purchases, and said that it will potentially raise interest rates three times next year.
Just a month after the Omicron variant was reported in Europe, 12,000 cases were detected in the UK on Sunday, but experts say most cases are going undetected and the real daily number may be above 200,000. Europe’s biggest countries are weighing more curbs to fight a surge in infections, from a new lockdown in the Netherlands to travel restrictions targeted by several countries. Europe faces a critical week of decisions that could disrupt the Christmas and New Year holidays.
“A weaker start to the week with Biden’s economic agenda in limbo and fresh Covid-19 lockdowns hitting Europe,” said Oanda senior market analyst Jeffrey Halley.
“In addition to Europe grappling with surging Omicron, the country is also bracing for energy shortages this week as freezing weather is set to boost demand at a time supply just can’t keep up,” said Halley.
At 10.15am, the JSE all share had lost 1.8% to 69,919 points and the top 40 1.96%. Industrial metals and resources had both fallen 2.54%, while precious metals had shed 2.53%, banks 2.3%, financials 2.02% and industrials 1.30%.
At the same time in Europe, London’s FTSE 100 had fallen 1.85%, France’s CAC 40 2.18% and Germany’s DAX 2.37%.
Earlier in Asia, the Shanghai Composite lost 1.07%, Hong Kong’s Hang Seng 1.89% and Japan’s Nikkei 2.13%.
At 9.50am, the rand had weakened 0.12% to R15.8926/$ and 0.24% to R17.8868/€, while it was little changed at R20.9924/£. The euro was 0.17% firmer at $1.1257.
Gold was little changed at $1,797.82/oz, while platinum lost 1.24% to $927. Brent crude had dropped 4.53% to $71.20 a barrel.
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