The JSE was weaker on Tuesday morning, along with its global peers, as investors braced for a possible interest rate hike from the US Federal Reserve, while digesting more US corporate earnings reports.
Investors are awaiting interest rate announcements from the Fed, the European Central Bank (ECB) and the Bank of England (BoE) later this week.
The Fed is widely expected to raise rates by 25 basis points (bps) on Wednesday when it concludes its Federal open market committee (FOMC) meeting, slowing its pace for a second consecutive time. Investors will be watching Fed chair Jerome Powel’s media briefing after the rate announcement for any clues on the central bank’s future plans.
Investors will also have US payrolls and employment data to digest later in the week, with analysts expecting the numbers to give markets some fresh direction.
“Stocks are under pressure in what will be a massive week of corporate earnings, three major central bank rate decisions (Fed, ECB and BOE), and an employment report that should keep wage pressures alive,” said Oanda senior market analyst Edward Moya.
“The January rally has hit a wall and probably won’t have a chance of returning until we get beyond Wednesday’s Fed press conference and Apple’s results after the Thursday close,” Moya said.
At 10.20am, the JSE all share had weakened 0.7% to 79,766 points and the top 40 0.77%. Precious metals had lost 1.92%, resources 1.35%, industrial metals 0.96%, banks 0.48%, industrials 0.46% and financials 0.42%.
At the same time in Europe, the UK’s FTSE was down 0.20%, France’s CAC 0.21% and Germany’s DAX 0.32%.
Earlier in Asia, the Shanghai Composite fell 0.42%, Hong Kong’s Hang Seng 1.04% and Japan’s Nikkei 0.39%.
At 10.27am, the rand had weakened 0.23% to R17.4147/$, while it was little changed at R18.839/€ and R21.4603/£. The euro was 0.25% weaker at $1.0824.
“Sustained directional momentum will only follow the central bank decisions later this week, and investors are therefore cautioned not to read too much into the current performance of the rand,” said RMB analysts.
Gold lost 0.87% to $1,906.07/oz and platinum 1.5% to $997.30/oz. Brent crude was 0.77% weaker at $83.73 a barrel.
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