The JSE was trading in negative terrain on Monday morning‚ taking its cue from weaker Asian and European markets amid global risk-off trade and falling oil prices after global oil producers failed to reach a deal to cap production on Sunday.
Asian markets were mostly weaker‚ with the Japanese Nikkei 225 falling 3.4%‚ the Hong Kong Hang Seng index down 1.22% and the Shanghai Composite 1.44% lower.
At 9.30am‚ the all share was down 0.81% and the and the blue-chip top 40 gave back 0.89%.
Banks led the decliners‚ down 2.07%‚ followed by resources‚ giving back 1.33%. Gold was the only index in the black due to safe-haven demand.
Rand Swiss Research analysts said Brent crude oil fell sharply on Monday morning‚ after major oil producers failed to reach a deal to freeze oil output.
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Saudi Arabia indicated any deal was impossible without Iranian participation‚ but Iran sees any production freeze as “ridiculous” considering the recent end to their sanctions‚ the analysts said.
“The Iranian oil minister indicated any Iranian production curtailment would amount to self imposed sanctions. Iran’s refusal to reduce production‚ and the disunity within OPEC‚ sets the stage for the global oil glut to continue‚” the analysts said.
In response to the news‚ Brent crude fell as much as 7%‚ before recovering some of its losses. Brent was trading 3.97% lower at $41.36 per barrel in morning trade.
Among individual shares on the JSE‚ Anglo American (AGL) declined 1.1% to R137.49 and oil company Sasol (SOL) shed 3.69% to R431.92 as the price of Brent crude oil fell.
Gold Fields (GFI) gained 3.28% to R60.54 and Harmony (HAR) picked up 3.07% to R53.45 after retreating almost 4% on Friday.
Standard Bank (SBK) shed 3.49% to R124 and Nedbank Group (NED) gave back 1.66% to R178.35 amid a weaker rand environment and broad-based risk-off trade.
– TMG Digital/BDlive
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