The local bourse trimmed early losses to finish approximately 0.30% lower at 81 915 points on Wednesday, marking its fourth consecutive decline. Global growth concerns persisted, impacting markets ahead of Friday's eagerly awaited US jobs report. On the domestic front, a new PMI survey revealed that South Africa's private sector grew slightly in August following two months of contraction. Moreover, business confidence in the country rose to 38 index points in 3Q24, the highest since 4Q22, from 35 in the previous period. The latest reading suggests that business pessimism has declined, driven by the establishment of the new coalition government and a stable electricity supply.
“This is the first business sentiment survey in South Africa following the formation of the Government of National Unity (GNU) and reflects cautious optimism about improving business conditions,” said RMB (JO:RMHJ). “Although respondents still noted constraints, especially weak demand, they were less negative about current conditions and, encouragingly, were more upbeat about business conditions going forward”, it added.
At 18h30, the rand had strengthened 0.58% to R17.85/$, 0.19% to R19.79/€ and 0.25% to R23.47/£.
Wall Street ended mixed on Wednesday following its worst day since early August in the previous session. The S&P 500 dipped by 0.10%, the Nasdaq, dominated by tech stocks, fell 0.30%, while the Dow Jones rose by 37 points. Investors analysed the latest JOLTS report, which revealed a slight decrease in July's job openings. This led to a decline in bond yields and heightened speculation that the Federal Reserve (Fed) could opt for a significant interest rate cut, with growing expectations of a 50 basis point reduction among traders.
European stocks fell sharply for the second consecutive session on Wednesday, driven by global risk-off sentiment as a wave of disappointing economic data dampened expectations for future earnings of the region's major corporations. The Eurozone's STOXX 50 dropped 1.40%, closing at 4 846, while the pan-European STOXX 600 declined by 1% to 515, sitting 2% below its record high from Monday. The sell-off in risk assets, initially triggered by the ISM PMI, was further fuelled by a weak JOLTS report, prompting a flight to safer investments.
Asian equity markets dropped significantly on Wednesday, following Wall Street's overnight losses as a sell-off in technology stocks and weak US manufacturing data fuelled recession concerns. Tech-focused markets in Japan, South Korea, and Taiwan were hit the hardest, each falling around 3%.
In commodities markets, Business Day reported that gold rose 0.14% to $2 496.20/oz and platinum 0.69% to $909.21/oz. At the close of local business, Brent crude was 0.62% weaker at $73.21 a barrel.
