JSE ends week flat as market seeks direction after surprise Bank decision
The JSE closed flat on Friday as the market sought direction from the surprising Reserve Bank decision to keep interest rates on hold on Thursday. Gold and banking shares gained on the day while platinums retreated. Analysts expected the Bank to cut rates by a further 25 basis points following July’s surprise cut, but the Bank cited challenging conditions ahead which mitigated against a rate cut at this stage. These included the possibility of higher rates later in the year in the US and UK, which could divert flows from emerging markets, thus weakening the rand, a key driver of inflation. Political risks include the ANC’s elective conference in December, where it will choose a new leader to replace President Jacob Zuma. Tension is already running high as a number of candidates have put themselves forward for consideration. The financial markets were caught off guard by the Bank’s decision, causing a significant round of rand buying as investors had priced in a rate cut, said FXTM a...
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