JSE flat as gold miners lose ground but banks rise
Fed chair Jerome Powell’s comments on Tuesday have moderated market expectations of interest rate cuts
The JSE was little changed on Wednesday morning, with miners faring worst, as investors moderated their expectations of looser monetary policy in coming months.
In a speech on Tuesday night, US Federal Reserve chair Jerome Powell emphasised that there was a need to insulate the Fed from short-term political pressure.
Oanda analyst Craig Erlam said Powell’s speech had had little effect, noting, however, that market expectations of a 50-basis-point cut at the Fed’s July meeting had halved.
Gold was under a little pressure on Wednesday, after an impressive string of gains that sent the price of bullion to a six-year high. Gold is seen as a hedge against loose monetary policy.
Gold miners looked set to snap a four-session losing streak on Wednesday, but banks were a little firmer, in line with the rand.
At 9.20am the all share was flat at 58,379.3 points, while the top 40 was up 0.15%. Gold miners were down 2.72%, while banks had added 0.61%.
Gold was 1.1% lower at $1,407.71/oz while oil had risen 0.44% to $66.09 a barrel.
Oil has pushed higher amid tension in the Middle East, as well as data showing declining inventories in the US. Last week, Iran shot down a US drone, prompting the White House to implement new sanctions against Tehran.