The JSE was weaker on Friday morning, along with its global peers as hawkish comments by the Federal Reserve chair Jerome Powell weighed on sentiment.
Stocks were sold off after Powell said the central bank wass “not confident” it had done enough in the battle against inflation.
Speaking at the annual conference hosted by the IMF, Powell said the federal open market committee (FOMC) was committed to achieving a stance of monetary policy that was sufficiently restrictive to bring inflation down to 2% over time, adding that “we are not confident that we have achieved such a stance”.
Powell’s comments dampened investors’ hopes that the Fed might have wrapped up its interest-rate hike campaign and might even start cutting rates from March.
Bond yields moved higher as stocks fell, as a result of Powell’s speech.
His comments come a few days after various Fed officials stuck to a cautious tone that interest-rate hikes might still be on the table as inflation remains above the central bank’s 2% target.
“Risk-off sentiment returned on hawkish Powell comments,” TreasuryONE currency strategist Andre Cilliers said.
“Fed chair Powell stated last night that the Fed might have to hike rates further to bring inflation back within the bank’s target range. Fresh data releases over the next few weeks will be critical to what the Fed will most likely do at its next FOMC meeting,” Cilliers said.
At 10.25am, the JSE all share had lost 1.28% to 71,305.60 points and the top 40 was down 1.36%. Precious metals had fallen 4.44%, resources 2.62%, industrial metals 2.06%, industrials 1.12%, food producers 0.89%, banks 0.13% and financials 0.1%.
In Europe, France’s CAC 40 was down 0.66% and Germany’s DAX 0.46%.
Earlier in Asia, the Shanghai Composite index lost 0.47%, Hong Kong’s Hang Seng 1.91% and Japan’s Nikkei 0.24%.
At 10.13am, the rand had weakened 0.11% to R18.6685/$, 0.11% to R19.9185/€ and 0.13% to R22.8264/£. The euro was little changed at $1.0669.
Gold lost 0.13% to $1,955.75/oz, while platinum was little changed at $857.66/oz. Brent crude was 0.88% firmer at $80.53 a barrel.
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