JSE a tad weaker as markets await fresh direction

The JSE was slightly weaker on Friday morning and global peers were mixed with liquidity expected to be thinner than usual as US players celebrate the Thanksgiving holiday.

Globallystocks are experiencing their best month in three years, driven by expectations of peaking US interest rates and lower bond yields, said TreasuryONE currency strategist Andre Cilliers.

“However, there are concerns that these lower yields, influenced by weaker growth and lower inflation, are not fully reflected in earnings estimates.”

On the economic data front, the preliminary reading of the US Purchasing Managers Index (PMI) print for November is expected later. The reading is expected to show how the US economy is coming under pressure, with consensus suggesting a drop back below 50 for the manufacturing index and slowing growth for services. Aside from the data, there is little else to offer direction to the markets.

Analysts say the downside risks to these readings exist given that the US economy is starting to feel the pain from the Fed’s aggressive monetary policy tightening, with the labour market finally coming under pressure and business optimism weakening.

At 10.30am, the JSE all share was off 0.16% to 75,314.32 points and the top 40 eased 0.16%. SA listed property had added 0.5%, banks 0.31%, the precious metals and mining index 0.23%, food producers 0.23% and financials 0.19%. Retailers had lost 1.26%, industrial metals 0.85%, resources 0.49% and industrials 0.31%.

In Europe, France’s CAC 40 and Germany’s DAX were little changed.

Earlier in Asia, the Shanghai Composite index was down 0.68% and Hong Kong’s Hang Seng was 2% lower, while Japan’s Nikkei gained 0.52%.

At 10.21am, the rand had weakened 0.48% to R18.8868/$, 0.45% to R20.6009/€ and 0.55% to R23.6822/£. The euro was little changed at $1.0908.

Gold was unchanged at $1,993.83/oz, while platinum gained 0.43% to $920/oz. Brent crude was 0.22% firmer at $81.23 a barrel.

tsobol@businesslive.co.za