The JSE was weaker on Thursday morning, with global peers mostly lower as global economic growth concerns and prospects of more interest-rate hikes by the US Federal Reserve weighed on sentiment.
Though investors expect the Fed to hold rates at its September meeting, stronger-than-expected services sector data in the US, combined with rising oil prices after production cuts were extended for three months, support the case for the Fed to possibly raise rates at the next meetings.
According to Bloomberg, the probability that the Fed will raise rates in November has increased to 53.3%.
Meanwhile, concerns about global economic growth have grown after German industrial orders plunged far more than expected to near-depressed levels seen at the peak of the Covid-19 pandemic. In China this week, the country's services activity expanded at the slowest pace in eight months in August, reflecting weak demand and reviving concerns about the health of the world’s second-biggest economy and what that means for demand globally.
“Global growth and high inflation worries continue to unsettle markets,” TreasuryOne currency strategist Andre Cilliers said.
“The jump in the price of oil and the still reasonably strong US economy are fuelling persistent high inflation concerns. The Fed is expected to keep interest rates unchanged at this month’s FOMC meeting, but the Fed will remain hawkish, and further rate hikes later are a concern if inflation data remains above the Fed's 2% target,” Cilliers said.
At 10.25am, the JSE all share had lost 1.16% to 73,544.85 points and the top 40 was down 1.2%. Industrial metals had fallen 2.02%, resources 1.68%, industrials 1.1%, precious metals 0.98%, banks 0.89%, financials 0.85%, retailers 0.73%, food producers 0.68% and SA listed property 0.59%.
In Europe, France’s CAC 40 had gained 0.11%, while Germany’s DAX had lost 0.13%.
In Asia, the Shanghai Composite lost 1.13%, Hong Kong’s Hang Seng 1.29% and Japan’s Nikkei 0.75%.
At 10.14am, the rand had weakened 0.15% to R19.2321/$, while it had strengthened 0.11% to R20.5813/€ and 0.12% to R23.9641/£. The euro was 0.14% weaker at $1.0708.
Gold gained 0.1% to $1,918.43/oz, while platinum lost 0.58% to $906.7/oz. Brent crude was 0.33% weaker at $90.27 a barrel.
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