It was a sea of red on the JSE on Monday, with the bourse closing 1.7% down, at 82 046 points – its lowest level since mid-September.
Earlier in the day, the JSE All Share Index (Alsi) fell over 1.8% and below the 82 000 level, before recovering some losses. The Top 40 ended Monday 1.79% down. Industrial stocks fell more than 2%, while financials were 1.89% lower.
In addition, the rand extended its losses from Friday, trading at R19.11 at 6pm. The South African currency is now close to 7% weaker than the dollar compared to a month ago.
“The rand is definitely one of the biggest losers with the risk-off sentiment globally,” Martin Rodgers, portfolio manager at Integrity Asset Management, posted on social media platform X. “The weakness is caused by the net selling of SA equities and bonds.”
Foreigners were net sellers of South African equities for the sixth consecutive day on Friday, he adds. “Year to date, they have sold R6.6 billion.”
Caution around the US
JSE and rand weakness come amid investor caution ahead of the announcement of key US economic data this week.
On Wednesday, the US Federal Reserve will publish the Consumer Price Index (CPI) report, followed a day later by December retail sales numbers, which are expected to show higher spending during the holiday season.
Bloomberg reports that CPI is forecast to have increased 3.3% from a year earlier, giving further impetus to suggestions that the US interest rate cutting cycle will be less aggressive than previously envisaged.
The stronger-than-expected US jobs data announced on Friday also casts doubts on further interest rate cuts. – moneyweb.co.za
