The JSE was weaker on Friday morning, along with its global peers, as investors digested the move by the Federal Reserve to raise interest rates amid the global banking sector concerns.
Th Fed increased its benchmark rate by 25 basis points — the ninth hike since March 2022 — taking the upper band of the Federal Funds Rate to 5%.
Markets staged a rebound in the previous session as investors bet that the Federal open market committee (FOMC) was close to pausing interest rate hikes amid worry about the banking sector. Fed chair Jerome Powel said the FOMC had considered pausing interest rates, but strong labour market data a week earlier had swayed the decision.
However, Powell also said that the central bank is open to additional tightening, fuelling concern about what more rate hikes would mean for the banking sector.
At 10.25am, the JSE all share had lost 1.19% to 74,685.07 points and the top 40 1.22%. Precious metals had fallen 2.38%, resources 2.31%, industrial metals 2.19%, banks 1.43%, financials 1.41% and industrials 0.62%.
At the same time in Europe, France’s CAC 40 had lost 0.97% and Germany’s DAX 0.96%.
Earlier in Asia, the Shanghai composite was down 0.64%, Hong Kong’s Hang Seng 0.6% and Japan’s Nikkei 0.13%.
“Jitters over the banking sector persist, with [rand] looking set for a pullback today as the dollar bounces on risk-aversion,” said Matete Thulare head of forex execution at RMB.
At 10.49am, the rand had weakened 0.7% to R18.2255/$, 0.1% to R19.6278/€ and 0.32% to R22.3035/£. The euro was 0.58% weaker at $1.0769.
Gold lost 0.33% to $1,986.02/oz and platinum 0.56% to $979.50/oz. Brent crude was 1.74% weaker at $74.17 a barrel.
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