The JSE was slightly weaker on Tuesday morning, while its global peers were mixed. The rand was firmer as investors digested various factors.
Locally, the government and Eskom are facing legal challenges over the ongoing power outages, while President Cyril Ramaphosa had to cancel his trip to the World Economic Forum in Davos due to the electricity crisis.
Economists now see a 45% chance of a recession due to the cumulative effect of load-shedding and higher interest rates on the local economy.
Meanwhile, legal challenges are being launched on multiple fronts against Eskom, the government and the energy regulator as power cuts have continued to escalate in severity over the past six months.
Investors now await the outcome of the meetings between Ramaphosa and various stakeholders around the Eskom crisis.
The rand fell more than 1.5% at one point in the previous session, before closing 1.35% weaker at R17.01/$. At 10.20am on Tuesday, it had strengthened 0.24% to R17.0141/$ and 0.2% to R18.4226/€, while it had weakened 0.16% to R20.7911/£. The euro was unchanged at $1.0828.
At 10.15am, the JSE all share had lost 0.11% to 79,081 points and the top 40 was down 0.1%. Precious metals had fallen 1.76%, resources 0.76%, banks 0.63% and financials 0.54%.
At the same time, the UK’s FTSE 100 had lost 0.13%, France’s CAC 40 0.1% and Germany’s DAX 0.09%.
Earlier in Asia, the Shanghai Composite lost 0.1% and Hong Kong’s Hang Seng 0.99%, while Japan’s Nikkei added 1.23%.
The Chinese economy grew 3% in 2022. The fourth-quarter reading came in at 2.9% year on year, which was significantly higher than the Bloomberg consensus forecast of 1.6%.
“This has underpinned hopes that we can expect a rebound from the world’s second-largest economy in 2023, given that Beijing has loosened its stance on lockdowns and remains steadfast in its commitment to underpin the economy,” said RMB analysts.
Gold lost 0.24% to $1,909.97/oz, while platinum was little changed at $1,061.20/oz. Brent crude was 1.09% firmer at $85.01 a barrel.
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