JSE muted amid China Covid cases

The JSE was little changed on Friday, while its global peers were mixed as an uptick in Covid-19 cases in China weighed on sentiment. Trading was thin, with US markets having a short day after the Thanksgiving holiday.

China’s battle with Covid-19 infections continues, with the country’s daily cases rising to a record high on Thursday, bringing major cities to a standstill as authorities fight to prevent the virus from spreading out of control by introducing more curbs.

“Lockdowns appear to be popping up in major Chinese cities in an attempt to get a grip on record cases, which will weigh heavily on economic activity once more, and in turn demand,” said Oanda senior market analyst Craig Erlam. “It’s now a question of how long they last, but clearly investors’ enthusiasm towards the relaxation of Covid restrictions was a bit premature.”

Bianca Botes, director at Citadel Global, said the risks of renewed restrictions in China could not be ignored when evaluating the global economic recovery trajectory, “especially when weighing China’s contribution to supply chains and the disruptions these ... restrictions can have on not only the Chinese economy, but the global economy as a whole.”

The JSE all share index and the top 40 were little changed, with the former at 73,154 points, up just 24 points. Banks added 0.6%, industrial metals were up 0.43% and financials collected 0.46%. The precious metals and mining index lost 0.82% and industrials eased 0.17%.

At 6.25pm, the Dow Jones industrial average was 0.51% firmer and the UK’s FTSE 100 gained 0.27%, while Germany’s DAX and France’s CAC 40 were little changed.

The rand touched an intraday worst of R17.1842/$ — having traded below R17/$ during the week.

“Thinner-than-usual liquidity conditions due to the US long weekend have kept USD/ZAR rangebound,” said RMB analysts. “However, the local currency will remain vulnerable to uncertainty in global financial markets, and so volatile.”

At 6.46pm, the rand had weakened 0.54% to R17.1036/$, 0.51% to R17.787/€ and 0.34% to R20.6764/£. The euro was little changed at $1.04.

Gold lost 0.23% to $1,751.10/oz and platinum gave up 0.55% to $980.60/oz. Brent crude was unchanged at $84.94 a barrel.