The JSE tracked weaker global markets on Thursday, as investors considered US jobs data while keeping a close eye on developments in the Middle East.
October has had a challenging start as escalating Middle East tension dampened investor sentiment. Market anxiety intensified before Israel’s ground operation in Lebanon.
Israel has not yet followed through on its threat of retaliation against Iran’s missile strike as Western and regional leaders work to stabilise the situation, reports Bloomberg.
“Risk aversion remains intact as market participants sit and watch how the tensions in the Middle East pan out,” said RMB head of forex execution Matete Thulare. “Markets remain jittery as they brace for Israel’s retaliation against Iran after [the] missile attack on Tuesday night.”
The JSE all share lost 0.75% to 86,461 points with major indices weaker, except for food producers. The top 40 was down 0.82%.
At 6.10pm, the Dow Jones industrial average was 0.66% weaker at 41,916 points, while markets were weaker in Europe.
Meanwhile, investors await further labour market insights, with a key September nonfarm payrolls report to be released on Friday.
Before the payrolls report, investors are assessing recent labour market indicators released this week. Private sector hiring exceeded expectations in September, while weekly jobless claims rose slightly.
The payrolls report is particularly important and will provide valuable guidance about the US economy’s trajectory, as it will influence the Federal Reserve’s rate-cutting strategy.
“If [Friday’s payrolls] jobs report reveals further signs of weakness, the Fed may reassess its November rate cut plans, potentially delivering a larger-than-expected reduction to support the economy,” said FXTM senior research analyst Lukman Otunuga.
Property group Vukile was among the winners on the day after the company said it would dispose of its shares in Lar España Real Estate Socimi, to Helios RE for €199.95m (R3.8bn). This will be done through the group’s 99.5%-held subsidiary Castellana Properties.
In July, Vukile said it had received a proposal from a consortium formed between Hines European Real Estate Partners III and a vehicle controlled by Grupo Lar Inversiones Inmobiliarias for its 24-million Lar España shares at €8.10 per share.
The company’s share price gained 1.59% to R18.53.
The rand was under pressure for most of the day, reaching an intraday low of R17.5537 to the dollar as “concerns about the Middle East and a strong US economy kept the local unit on the sidelines”, said Thulare.
At 6.52pm, the rand had weakened 0.83% to R17.4905/$ and 0.65% to R19.2723/€, while it strengthened 0.25% to R22.9495/£. The euro was 0.16% weaker at $1.1028.
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