JSE opens flat as traders keep watchful eye on rand and oil
A sharp rise in oil prices in a weak rand environment might lead to higher inflation and interest-rate hikes from the Reserve Bank
The JSE opened flat on Wednesday in cautious trade as the market tried to gauge the effect of a weaker rand and higher oil prices on the market. Platinums led at the opening while banks and retailers lost ground. Property stocks were flat. Higher oil prices and a weaker rand will result in further petrol price hikes, which could see inflation breaching the top end of the Reserve Bank’s 3%-6% target range. The Bank is likely to raise interest rates by 25 basis points before the end of 2018. The rand, along with its emerging-market peers, was on the back foot on Wednesday morning, and this scenario is likely to continue in the short term, analysts at Nedbank Corporate and Investment Banking said. “Locally, the focus is on the price of fuel and its possible knock-on effects, with the Reserve Bank warning that the risk of CPI inflation exceeding 6% should not be underestimated,” they said. Brent crude breached $85 a barrel again on Wednesday, while the rand was at R14.3530 to the dolla...
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