ThinkDaily - Market Turmoil as SVB Collapse Sends Shockwaves through Global Stock

  • Market Overview

During Monday’s local market trading session, the Top 40 index ended the day with a 1.36% decline, while the Resources 10 sector saw a 1.82% increase. The Financial 15 and Industrial 25 sectors both experienced declines of 3.1% and 2.11%, respectively. The JSE all-share index followed the trend of global markets and dropped over 2% during intraday trading, mirroring the decline of European markets. Banking stocks were the hardest hit.

During the trading session, banks dropped by 3.56%, financials eased by 3.14%, retailers lost 2.7%, industrials gave up 2.04%, and industrial metals declined by 1.18%.

Global stock investors are analysing the impact of the collapse of Silicon Valley Bank (SVB). Over the weekend, the US Treasury and Federal Reserve intervened by providing emergency funding to the banking sector in response to the potential banking crisis triggered by SBV's sudden collapse on Friday. Investors are speculating that the financial shock could lead the Federal Reserve to halt or be less aggressive with its rate hikes.

The rand’s exchange rate was R18.17 to the US dollar , R22.16 to the Great British pound , and R19.49 to the Euro . Despite positive results, MTN Group’s (JO: MTNJ ) share price dropped by 10.68% at the end of yesterday's trading session on weak guidance and the negative impact of load shedding on its results. Sun International (JO: SUIJ ) and Old Mutual (LON: OMU ) have released their annual results today.

MTN Group Limited’s historical chart

Figure 1: MTN Group Limited’s historical chart

On Monday, gold prices experienced a surge as the metal's safe-haven appeal attracted investors who were alarmed by the collapse of Silicon Valley Bank. Other precious metals, silver, palladium, and platinum also benefited from the fallout.

Market Moves (13 March 2023)

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