Global Markets Swing into Red on Middle East Tensions
Global markets swung into the red overnight as a reignition of tensions in the Middle East and a resulting spike in oil prices raised concerns about another round of inflationary pressures, which could keep interest rates elevated.
In its morning brief, First National Bank (FNB) said trade in Asia has been subdued across most regions. Japan’s Nikkei 225 fell 0.58%, while Hong Kong’s Hang Seng bucked the trend, surging 2.54% on renewed appetite for technology and consumer stocks, with Tencent (+3.38%) a standout performer.
In the US, the Federal Reserve (Fed) meeting minutes are due out later today, which also kept sentiment cautious, with the S&P 500 (-0.45%), the Nasdaq (-1.16%), and the Dow Jones (-0.25%) all closing in negative territory.
European markets, including the FTSE 100 (+0.13%) and the Euro Stoxx 50 (-1.22%), were mixed, with participants awaiting the Fed minutes for fresh directional cues and monitoring headlines surrounding the US-Iran conflict.
The Johannesburg Stock Exchange (JSE) is set for a soft open this morning, as global markets have come under pressure following renewed United States (US) strikes on Iranian targets and fresh attacks on commercial vessels in the Strait of Hormuz, sparking another round of inflationary concerns.
As a result, most Asian markets are trading in the red this morning, with global futures also being reflective of a risk-off tone. The ASX Metals and Mining Index declined 2.47%, which is likely to weigh on local resource counters and miners at the start of trade.
Gold is slightly firmer, providing some support to gold miners on the JSE, while platinum is marginally softer, offering little fresh impetus to precious metals counters.
That being said, Tencent has advanced 3.21%, a move that should lend meaningful support to Naspers and Prosus at the open.
The local bourse traded lower on Tuesday, falling sharply in the late afternoon as oil prices rebounded and precious metals retreated following attacks on commercial shipping in the Strait of Hormuz.
The All Share Index and Top 40 declined 0.75% and 0.76% to 110 325 points and 102 013 points, respectively. The market weakness was driven primarily by resource counters like Valterra (-5.22%), South 32 (-4.12%) and Harmony (-4.11%), dragging Resources 2.71% lower.
Financials (-0.84%) traded in line with the market, while Industrials (+1.03%) reversed losses from the previous session, with gains in heavyweights Naspers (+5.16%) and Prosus (+4.15%) limiting broader market losses on the back of a strong rally in Tencent, whose shares advanced after investors welcomed the group’s $1.5 billion partial disposal of its Kuaishou stake. Oil Prices Edge Higher on Fresh US, Iran Tensions
