The JSE was weaker on Monday morning, with global peers mixed as trading was expected to be thin due to US markets being closed for the President’s Day holiday.
Friday’s report from the US showed producer inflation rose more than expected in January. The producer inflation data followed a hotter-than-anticipated January consumer report earlier in the week.
The data dampened investors’ hopes that the Federal Reserve could begin cutting interest rates sooner than thought.
In the meantime, the hope is that the economy will remain resilient despite the challenge of high-interest rates. That would allow companies to deliver growth in profits that could help prop up stock prices, Bloomberg reported.
“Following a rather bumpy ride last week, US data sent mixed signals on what markets can expect in terms of rate hikes by the Fed,” Citadel Global director Bianca Botes said. “It’s a US holiday today, as the country celebrates [George] Washington’s birthday. On the data front, it is a light day with no key releases. Trade should be limited.”
At 10.35am, the JSE all share had lost 0.5% to 73,246.62 points and the top 40 was down 0.56%. Precious metals had added 0.24%, industrial metals 1.1%, SA listed property 0.85%, resources 0.67%, industrials 0.66%, retailers 0.56%, food producers 0.23% and financials 0.12%.
At the same time in Europe, France’s CAC 40 was down 0.41% and Germany’s DAX 0.31%.
Earlier in Asia, the Shanghai Composite was up 1.56%, while Hong Kong’s Hang Seng lost 1.07% and Japan’s Nikkei was little changed.
Locally, all eyes turn to the finance minister Enoch Godongwana’s budget statement on Wednesday. Analysts expect the finance minister’s address to touch on sluggish economic growth due to various internal challenges, including inadequate energy supply and deficient infrastructure in rail and ports.
“The market will watch the speech closely and the potential is for the rand to weaken if fiscal consolidation is not adhered to,” TreasuryOne currency strategist Andre Cilliers said.
At 10.12am, the rand had weakened 0.17% to R18.8755/$, 0.27% to R20.3591/€ and 0.5% to R23.83/£. The euro was little changed at $1.0785.
Gold gained 0.31% to $2,019.28/oz, while platinum was unchanged at $905.8/oz. Brent crude was 0.19% weaker at $82.63 a barrel.
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