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Weaker Asian markets await JSE on Monday amid Covid-19 fears

Rising infection numbers in countries including the US have raised concern as SA counts cost of violence


The JSE faces mostly weaker Asian markets on Monday morning with some concern over rising Covid-19 numbers, while in South Africa focus is still on counting the costs of recent violence.

The spread of the Delta variant of the coronavirus is concerning markets, with officials in the US warning about a sharp acceleration in infection rates for the unvaccinated. The UK is set to lift restrictions on Monday, despite infections rising there.

Markets are looking at these dynamics wondering whether the consumer will remain or turn cautious, particularly in countries where reopening strategies look set to continue despite the increase in infection rates, said National Australia Bank analyst Rodrigo Catril in a note.

Markets were also reacting to news oil cartel Opec has reached a production deal after resistance from the United Arab Emirates. The members have agreed to phase out almost 6-million barrels per day in production by September 2022.

Oil prices have risen more than 40% so far in 2021, putting pressure on SA’s inflation outlook.

Local focus is likely to remain on the threat of violence, though analysts have noted that SA’s outlook will only be under serious threat if disruptions are protracted. Shares of landlords and retailers will be watched this week.

Rand hedges lifted the JSE last week, which was still a bad one for retailers, with Massmart losing about 11%.

In morning trade the Shanghai Composite was down 1.59%, the Hang Seng 1.33%, and the Nikkei 0.31%.

Tencent, which gives direction to the JSE via the Naspers stable, fell 2.39%.

Gold was 0.78% weaker at $1,814.07/oz while platinum gained 0.11% to $1,104.21. Brent crude was 0.75% lower at $72.71 a barrel.

The rand was little changed at R14.44/$.

There is little on the local corporate and economic calendar on Monday, with focus expected to remain on any incidents of violence, as well as data on the damage from last week.


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