The JSE was weaker on Tuesday morning, with its global stocks mixed as investors assessed the implications of the Silicon Valley Bank (SVB) collapse.
Stock markets remained under pressure despite the US treasury and Federal Reserve stepping in to provide emergency funding to the banking sector, in the face of a potential banking crisis.
However, some market participants are betting the sudden financial shock could cause the Fed to pause interest-rate hikes.
“Financial markets remain rattled after the sudden shutdown of SVB. There are increased concerns about contagion risk, which raises the possibility of a new financial crisis,” Citadel Global director Bianca Botes said.
“The focus for today is squarely on the US CPI print. A high reading will place the Fed in a tight spot amid the current banking system concerns,” said Botes. “Markets are now ruling out a 50-basis-point hike for March, and are positioning for the probability that the Fed will hold rates steady.”
At 10.15am, the JSE all share had lost 0.74% to 74,942.50 points and the top 40 fell 0.67%. Industrial metals had fallen 1.63%, resources 1.32%, banks 1.03%, financials 1%, precious metals 0.78% and industrials 0.36%.
At the same time in Europe, France’s CAC 40 had gained 0.1% and Germany’s Dax 0.2%.
Earlier in Asia, the Shanghai composite fell 0.72%, Hong Kong’s Hang Seng 2.4% and Japan’s Nikkei 2.19%.
At 10.07am, the rand was little changed at R18.2251/$ and R22.1355/£, while it had strengthened 0.18% to R19.4819/€. The euro was 0.35% weaker at $1.069.
Gold lost 0.34% to $1,906.14/oz and platinum 0.56% to $990.40/oz. Brent crude was 1.49% weaker at $79.49 a barrel.
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