The JSE was weaker, in line with its global counterparts on Monday, while oil prices surged to a 13-year high amid concerns the West is gearing up to ban Russian oil and gas due to its continuing invasion of Ukraine.
Russia has intensified its operations in Ukraine, with a US official confirming further sanctions are being considered, which sent the oil price above $130 for the first time since 2008.
Russia is the world’s largest gas exporter and one of the largest oil exporters, with sanctions expected to deal an additional blow to a global economy already facing high energy prices and supply-chain difficulties.
Brent crude was 11.25% firmer at $122.87 a barrel at 5.30pm local time, having jumped more than 15% earlier and after touching an intraday high of $130.68 a barrel.
“The worsening situation in Ukraine and talks of an embargo on Russian oil has seen crude at a multiyear high, raising fears of a recession in Europe and a weakening in global economies, including the US,” said TreasuryONE currency strategist Andre Cilliers.
The JSE tracked weaker global markets as Russia’s invasion of Ukraine heads into a second week.
However, European markets were off their earlier lows in late afternoon trade with sentiment “helped by comments from Germany’s finance minister, Christian Lindner, that the country is against any push to stop Russian oil and gas imports,” said Oanda senior market analyst Craig Erlam.
“Investors are waiting to see if the US will ban Russian oil imports which could see a further spike in the oil price and have knock-on effects on inflation,” said Erlam
The JSE all share lost 1.92% to 73,296 points and the top 40 retreated 1.78%. Banks fell 4.47%, financials 4.05%, industrials 3.02% and SA listed property 3.76%. The precious metals and mining index firmed 0.37% after having risen more than 8% in intraday trading, while resources firmed 0.11%, having gained more than 5% earlier.
At 6.15pm , the Dow Jones Industrial Average was 1.23% weaker and the S&P 500 had fallen 1.4%. Asian markets were lower, while in Europe, London’s FTSE 100 was little changed, while France’s CAC 40 lost 0.61% and Germany’s DAX fell 1.2%.
At 5.26pm, the rand had strengthened 0.61% to R15.2952/$, 1.21% to R16.6162/€ and 1.25% to R20.0768/£. The euro was 0.57% weaker at $1.0863.
Gold gained 0.53% to $1,981.17/oz and platinum 0.77% to $1,136.50.
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