The JSE extended losses into the second trading day of the new year, pulled lower by mining stocks, with global markets also weaker as the year-end rally ran out of steam,
With the US economy still on shaky ground and uncertainty about when the Federal Reserve will finally begin cutting rates, investors seem to have curbed their enthusiasm, reported Bloomberg.
Investors will assess minutes from the Fed’s December policy meeting later on Wednesday which could offer further clues about the future rate path before the central bank meets later in January.
“Everyone will naturally look to read too much into the first trading week of the year, but after an unusually strong end to the year, that’s probably not the best idea,” said Oanda senior market analyst Craig Erlam. “If markets slightly pare gains in the first quarter I don’t think that necessarily spells trouble for the year, especially if we see a couple of hiccups in the data.”
“The first test of the new year is the US jobs report on Friday, and it will be interesting to see how traders respond if we’re given another promising batch of data,” Erlam said.
The JSE all share closed down 1.58% at 74,510.72 points on Wednesday, with the top 40 1.79% lower. The precious metals and mining index fell 5.11%, resources 3.59%, industrial metals 2.77%, banks 2.39%, financials 2.14% and retailers 1.79%.
At 6pm, the Dow Jones industrial average was 0.7% weaker, while in Europe London’s FTSE 100 was down 0.63%, France’s CAC 40 1.83% and Germany’s DAX 1.57%.
The rand weakened to its worst intraday level in more than two weeks as “the risk-off move and stronger dollar saw the local currency reverse recent gains,” said TreasuryONE currency strategist Andre Cilliers.
At 5.38pm, the rand had weakened 1.43% to R18.7979/$, 1.11% to R20.5005/€ and 1.54% to R23.7386/£. The euro was 0.32% weaker at $1.0906.
Gold lost 1.2% to $2,033.71/oz and platinum 1.44% to $968.88/oz. Brent crude rose 2.8% to $78.13 a barrel.
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