The JSE closed slightly weaker on Tuesday, reversing the session’s earlier gains, while global markets were mixed amid a flurry of quarterly earnings reports from US companies.
Investors were also keeping a close eye on a slew of data from the EU, the UK and US.
In Europe, the S&P Global’s flash Composite Purchasing Managers’ Index (PMI) rose to 50.2 in January from 49.3 in December. Reuters reported that the numbers failed to excite investors who are still concerned about further interest rate hikes by the European Central Bank.
Business activity in the US private sector continued to contract in early January, though at a slower pace than in December. The S&P Global Manufacturing PMI nudged up to 46.8 from 46.2, which financial website Trading Economics said continued to point to another contraction in factory activity which was the second-fastest since May 2020 as manufacturing demand conditions remained subdued.
Elsewhere, the Services PMI recovered to 46.6 from 44.7, and the Composite PMI came in at 46.6, compared to 45 in December.
“The earnings season will continue to dominate and so far, there isn’t really anything positive to take away from it. There are still a lot of huge names to report, of course, but so far it basically underlines everything investors already think about the economy at the moment,” said Oanda senior market analyst Craig Erlam.
“Economic data we’ve seen doesn’t exactly inspire. The European PMIs were a little better than expected and improved in many cases while still being pretty weak. The all-important UK services sector on the other hand was both weak and softer than expected, and even last month's number was revised lower into contraction territory,” he added.
“So basically the euro area may in fact avoid a recession while not really growing in any significant way, and the UK is almost certainly heading for one ... And that's before we talk about interest rates again and whether market expectations are in fact too optimistic which would make the situation worse.”
The JSE all share slipped 0.11% to 80,037.01 points and the top 40 eased 0.1%, led by industrial metals, resources, and precious metals, which fell 2.12%, 1.28%, 1.25% and 0.35%, respectively.
At 7.19pm, the Dow Jones industrial average recovered from a lower opening and was little changed at 33,641.96 points. Markets in Europe were mixed.
At 7pm, the rand had weakened 0.1% to R17.2061/$ and 0.19% to R18.703/€, while it was 0.21% stronger at R21.1979/£. The euro was little changed at $1.087.
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