Global Equity Market Mixed, FTSE 100 Climbs, Wall St. Steadies
The global equity markets continue to face pressure from geopolitical instability, which is affecting buying interest in the stocks of some cross-border policy-exposed companies.
The market sentiment weakened following renewed attacks between the U.S. and Iranian military near the Strait of Hormuz, amidst diplomatic talks to end the war that started in February.
Asian markets are trading lower on Thursday, First National Bank (FNB) said in a morning brief, a downbeat action linked to renewed uncertainty over United States-Iran talks and disruptions to oil flows.
In the same vein, the Hang Seng Index is down 2.32%, the Nikkei 225 is down 1.26%, and the ASX 200 is down 1.56%, according to a morning brief released by the Bank. Technology stocks dragged Chinese indices, and caution prevailed ahead of key Australian economic data.
In Europe, the FTSE 100 edged up 0.13%, and the Euro Stoxx 50 gained 0.11%, buoyed by lower energy prices and hopes for progress in resolving Middle East tensions, which lifted risk appetite but pressured oil majors.
Wall Street ended little changed as investors awaited inflation data, with the S&P 500 up 0.02%, the Nasdaq rising 0.07%, and the Dow Jones advancing 0.36%.
The Johannesburg Stock Exchange (JSE) is set for a weaker open this morning following a softer prior close, as global futures trade broadly negative and Asian markets remain under pressure.
Risk sentiment has deteriorated overnight, with weakness across commodity-linked sectors likely to weigh on local equities at the open. The S&P/ASX 300 Metals & Mining Index declined by 2.78%, suggesting potential weakness in South African resource counters, particularly diversified miners.
Tencent is also down 3.08%, implying a weaker start for Naspers and Prosus given their significant exposure to the Chinese technology giant. Softer precious metals prices may add further pressure to the broader resources complex.
On the economic calendar, South Africa’s Producer Price Index data for April is due for release today. Later in the day, attention turns to the South African Reserve Bank’s interest rate decision at 15:00, after key US GDP and labour market data at 14:30.
The JSE closed lower on Wednesday as investors adopted a cautious stance ahead of the South African Reserve Bank’s interest rate decision this afternoon, with resources stocks bearing the brunt of the selloff.
The All Share Index fell 0.34%, and the Top 40 declined 0.42%. Resources (-1.71%) led the losses, weighed down by a 1.54% decline in the mining sector. Financials ended its two-day streak and fell 0.11%, while Industrials (+0.65%) bucked the trend and ended in green territory amid a 12.02% surge in Telkom. Irish Economy to Grow at Slow Pace with Upside Inflation Risk -IMF
