JSE slightly up as gold stocks gain and market awaits Fed rate decision
The JSE opened marginally firmer on Wednesday as global markets took a breather ahead of an expected interest-rate hike by the US Federal Reserve in the evening, SA time.
The market has priced in an increase of 25 basis points, with the main focus on the Fed’s forward view. Some analysts believe it could be more hawkish following higher-than-expected inflation numbers released on Tuesday.
"The market is expecting the Fed to turn hawkish on the back of the inflation print and adjust their forward guidance by the data," said TreasuryOne dealer Andre Botha.
However, analysts at Barclays Research said fiscal stimulus policies could lead to a modest overshoot of inflation above the Fed’s 2% target.
"Yet, we do not believe current inflation trends were likely to cause the Fed to move faster or alter its stance of gradual policy normalisation," Barclays said.
The rand traded weaker at R13.38 to the dollar from a close of R13.3241 on a flat euro at about $1.1748.
The weaker rand lifted gold stocks and rand hedges at the opening with banks and retailers lower. Financials were higher on Sanlam and Old Mutual.
The Dow closed flat on Tuesday with the Nikkei 225 rising 0.38% on Wednesday and the Hang Seng losing 1.25%.
At 10am the all share was 0.25% up at 58,350.70 points and the top 40 rose 0.31%. The gold index rose 1%, financials 0.34%, industrials 0.29% and resources 0.10%.
General retailers fell 1.14%, platinum 0.34% and property 0.14%.
Glencore was up 2.36% to R69.50. It was announced that Democratic Republic of Congo state miner Gecamines would drop legal proceedings to dissolve a copper and cobalt joint venture with a subsidiary of Glencore,
Richemont added 1.26% to R124.94 and Naspers 0.55% to R3,370.11.
Peregrine Holdings jumped 5.4% to R21.07. Segmental headline earnings were up 7% to R535m for the year to end-March. The dividend rose 10% to 170c per share.
Sanlam gained 1.58% to R74.77 and Old Mutual 1.29% to R40.
Woolworths dropped 1.01% to R56.12, the lowest level in 2018 so far.
Resilient softened 0.74% to R59.16. Stor-Age gained 0.77% after reporting an annual dividend rise of 11% on Tuesday.
Sea Harvest rose 2.46% to R12.50. The group said on Tuesday it had completed the takeover of trawling and operating group Viking Fishing, for an undisclosed amount.