JSE will open to lower Asian markets as traders wait to see what the latest US non-farm payrolls, which shows the total number of paid workers in the world’s largest economy excluding certain categories, and other data being released later on Friday holds.
The Nikkei in Japan lost 0.64% in early trade and the Hang Seng in Hong Kong 1.13%. The Shanghai composite remains closed as China celebrates its Golden Week holiday. Year to date the Nikkei is down 7.36%, the Hang Seng 23.48% and the Shanghai composite 16.74%.
Japanese markets were also down as markets digested US Federal Reserve officials signalling they remained determined to bring down inflation meaning more interest rate hikes are likely. This in turn triggered fears of a possible recession.
Hong Kong and Japanese markets were also dragged down by losses on Wall Street for the second day straight. Sentiment was also hampered by the US blacklisting more Chinese companies, including drone maker DJI Technology.
Tencent, which influences the JSE via Naspers, fell 2.45% on Friday morning.
The Nasdaq ended 1.15% lower on Thursday, followed by the S&P 500 with 1.02% and the Dow Jones 0.68%. The Nasdaq is down 30.06% since the start of 2022, the S&P 500 21.93% and the Dow Jones 18.20%.
“The past 24 hours have seen the market trading extremely nervous, with patchy liquidity and price action dominated by US yields and risk. As for today, we could see some more position adjustments as payrolls on Friday is what the market is waiting for now,” SPI Asset Management managing partner Stephen Innes wrote in a note.
“Hawkish central bank talk might be one factor for weaker risk appetite, although we haven’t really heard anything new, and it might be just a case of traders resetting positions ahead of tonight’s US employment report,” Bank of New Zealand senior market strategist Jason Wong wrote in a note on Friday.
In local market news, the JSE made cautious gains on Thursday while US and European markets were mostly weaker as investors turned their focus to the US jobs report on Friday. The JSE all share gained 0.34% to 65,832.67 points while the top 40 added 0.36%.
The dollar strengthened again and is hovering around the R18/$ mark as it gained 0.13%, trading at R18.01. The greenback has gained 12.78% against the rand so far this year.
On the commodities front, Brent crude, gold and platinum prices all declined. Brent crude dipped by 0.04% to $94.38 a barrel, gold 0.03% to $1,710.26/oz and platinum 0.27% to $919.69.
No major corporate or economic news is expected on Friday except the SA Reserve Bank publishing the September figures for its foreign exchange reserves.
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