JSE could weaken on Tuesday as virus death toll rises
The JSE looks set for another day of pressure on Tuesday, amid a heavy sell-off of global counters due to the rising death toll from the coronavirus.
US markets had their worst day in about four months on Monday, with European markets also down 2%, and travel stocks particularly effected.
The viral outbreak has raised the fear of economic disruption, with millions of people in China already facing travel restrictions, and more countries report cases of the virus.
Some companies are evacuating workers from affected areas, Bloomberg reported, with the number of cases soaring overnight.
Panic and fear are powerful drivers of market flows and typically when the sell-off begins it can be faster and deeper than most can anticipate, BK Asset Management’s MD for foreign exchange strategy, Kathy Lien, said in a note.
Without a positive turn in the outbreak, or other positive events, further losses for currencies and equities can be expected, said Lien.
In morning trade gold was 0.13% lower at $1,579.80/oz while platinum had risen 0.38% to $988.26. Brent crude was 0.1% higher at $58.90 a barrel.
The rand was flat at R14.59/$.
Markets in China and Hong Kong are closed on Tuesday for the Lunar New Year holiday, while Japan’s Nikkei had fallen 0.9%.
There are no major local or international economic releases on Tuesday, with focus instead on news regarding the viral outbreak.
Markets are also waiting for policy announcements from both the Bank of England and US Federal Reserve later in the week.