JSE PREVIEW: JSE likely to edge lower in line with world markets

The JSE is likely to head south on Friday, leaving the all share on track for its first weekly loss this year, after quarterly earnings reports from big US tech companies including Apple disappointed.

Asian markets were mostly lower with Hong Kong’s Hang losing a hefty 2% while China’s Shanghai Composite shed 1.40%.

But even so, stock markets were vulnerable to short-term pullbacks after a strong start to the year, fuelled by optimism around the slowing pace of interest rate increases by global central banks as well as China ditching its zero-Covid policy stance.

In commodity markets, Brent crude stood at $81.88 per barrel in early trade, the lowest level since November. The retreat in international oil prices is positive for SA because of its importer status, but is negative for stocks such as Sasol and MTN Group.

The rand was marginally weaker on the day at 17.10/$ but still maintained gains for the week so far after the US Federal policy meeting earlier in the week. Before the Fed’s meeting, the rand changed hands at R17.40/$.

The Fed was categorical in the statement that it would “stay on course” until inflation returns to its 2% target goal, implying that more rates could be needed in future. But the market clung onto the “disinflationary process” phrase that chair Jerome Powell said was starting to take shape.

The release of the US nonfarm payrolls report this afternoon will be in focus. The world's largest economy is expected to have created about 185,000 jobs in January.

mahlangua@businesslive.co.za