The JSE was little changed on Monday, while the rand remained under pressure as investors kept a close eye on the geopolitical tensions in the Middle East.
Oil prices jumped more than 4% in intraday trading after Palestinian militants launched an attack on Israel at the weekend.
Investors are concerned that the rising geopolitical tensions in the region could have further implications for the oil market, further inflicting inflationary risks.
The rising geopolitical tensions caused by the conflict could have ramifications for the energy market, stoking further volatility in the global financial markets that has kept traders worried with persistent inflation and higher interest rates, reported Bloomberg.
By 6.09pm, the Brent crude was up 4.26% at $87.96 a barrel, after having touched an intraday high of $88.95.
“The surge in crude oil prices is likely to be a temporary, knee-jerk reaction. For the conflict to have a lasting impact on oil markets, there would need to be a sustained reduction in oil supply or transport. Neither Israel nor the Palestinian territories are major oil producers,” said RMB analysts.
“However, the conflict is geographically close to a key oil-producing and export region for global consumers. One significant concern for the oil market is the potential involvement of oil-rich Iran. Iran’s oil supply and exports could face immediate downside risks,” RMB analysts said.
The JSE all share index and the top 40 were little changed, with the former at 71,648.39 points. The precious metals and mining index rose 5.16% and resources 2.24%. Retailers lost 1.58%, industrials 1.09%, banks 0.74% and financials 0.7%.
At 6.05pm, the Dow Jones industrial average was little changed, while markets were weaker in Europe.
This week, investors will get an insight into inflation in the US, with producer and consumer inflation data to be released on Wednesday and Thursday, respectively. The Federal Reserve will release meeting minutes from its latest FOMC meeting on Wednesday.
Thursday’s US CPI report could show headline inflation is moderating but core inflation is proving to be sticky, said Oanda senior market analyst Edward Moya.
At 5.49pm, the rand had weakened 0.51% to R19.3938/$ and 0.38% to R23.6747/£, while it was little changed at R20.4448/€. The euro was 0.41% weaker at $1.0542.
Gold gained 0.96% to $1,850.19/oz and platinum 0.56% to $883.32/oz
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