JSE eases as Omicron takes wing

The JSE closed weaker on Thursday as the new Omicron coronavirus variant spread. A hawkish tone from the US Federal Reserve (Fed) chair on Wednesday also weighed on sentiment.

More countries, including the US, have detected infections with the Omicron strain. While it’s not yet clear whether it is more severe than the main Delta virus, investors are jittery about the prospects for the economy and when the pandemic could end.

Chair Jerome Powell said the Fed is expected to discuss speeding up the taper of its minimum $120bn-a-month bond-buying programme. Despite the potential disruption of Omicron, the reduction in bond purchases could be accelerated from the $15bn-a-month schedule announced in November.

“Stocks were off to a good start in

December as traders were optimistic Omicron would not lead to more severe illness than Delta ... and viewed Powell’s hawkish twist as more of a shift to the centre,” Oanda senior market analyst Edward Moya said.

“Stocks gave up most of their gains after the US confirmed its first case of the Omicron variant. We’ve seen this movie before and markets will likely remain Covid variant headline-driven until a clear assessment about this wave can be made.”

The JSE all share slipped 0.25% to 71,020.76 points and the top 40 eased 0.36%. Precious metals fell 1.72%, resources 0.45%, industrials 0.27%, banks 0.21% and financials 0.1%.

At 6.38pm, the Dow Jones industrial average was 1.27% firmer at 34,455.29, while in Europe, London’s FTSE 100 closed 0.55% lower, Germany’s DAX ended down 1.31% and France’s CAC 40 shed 1.25%.

Shares in TFG, the owner of the Foschini and Totalsports retail chains, firmed the most in four days — rising 1.55% to R124.23 — after announcing it had bought digital delivery firm Quench, which already has partnerships with Woolworths and Dis-Chem, for an undisclosed amount.

The apparel giant bought Quench through its Labs division as part of its ambition to become an “e-commerce powerhouse”, it said in a statement.

The rand held steady below R16/$, though conditions remained volatile, reaching an intraday best of R15.76/$. At 6.20pm, it was 1.27% stronger at R15.8467/$, 1.45% at R17.9194/€ and 1.07% at R21.0821/£. The euro was little changed at $1.1312.

Gold slid 0.79% to $1,766.81/oz, but platinum was little changed at $936.5. Brent crude oil was up 1.06% at $69.62 a barrel.