Global markets closed lower on Thursday as investors continued to mull over the minutes from the US Federal Reserve's July meeting, which hinted at likely future interest rate hikes this year. This caused Wall Street to trade in the red for the third consecutive session, with the tech-heavy Nasdaq losing 1.17%, the S&P 500 falling by 0.77% and the Dow losing 0.84%.
European markets also declined, with the pan-European Stoxx 600 dropping 0.90%, its lowest level in five weeks, driven by a 2.80% slide in industrials and a 1.80% decline in tech shares. The German DAX also reached a five-week low after it lost 0.60%.
The FTSE/JSE All Share Index dropped almost 0.70%, mirroring its international peers. At the same time, a stronger US dollar continued to impact the rand which traded around R19/$ at 22h00. Local investors closely monitored China's economic and financial outlook after “one of the country's biggest developers, China Evergrande, filed for bankruptcy in New York. Meantime, state-owned property developers warned of widespread losses, raising concerns that the Chinese housing crisis is expanding from the private sector to firms with government backing. In addition, investors stayed unimpressed with bit-by-bit support measures from Beijing,” Trading Economics reported.
After a few days of loss, the Hang Seng ended flat on Thursday after “China’s Premier Li Qiang said Wednesday that Beijing is determined to achieve the 2023 economic target by expanding domestic demand and boosting consumption. He also highlighted the need to combine security and efforts to boost business growth,” Trading Economics reports. Japanese shares followed losses on Wall Street overnight after the most recent Fed minutes emphasised that upside risks to inflation still exist and that additional interest rate hikes are still on the table.
Brent crude oil hovered over $84 per barrel at 22h30 on Thursday as demand expectations in the two biggest oil users in the world were hampered by economic worries in China and the potential for additional interest rate hikes in the US.
