MARKET WRAP: JSE muted as markets struggle for direction
Investors will be watching closely as Fed chair Jerome Powell testifies before Congress on Tuesday
The JSE was little changed on Monday and its global peers were mixed as markets struggled for direction following the US Federal Reserve’s policy shift.
The local bourse fell to a two-week low on Friday, tracking weaker global markets after the Fed’s tone turned surprisingly hawkish when it released the latest meeting minutes from the federal open market committee (FOMC) on Wednesday. The Fed brought forward its timetable on interest rate hikes by a year, while also warning that inflation could be more persistent than expected.
Investors will probably be looking for a clearer picture when Fed chair Jerome Powell testifies before Congress on Tuesday. A number of Fed officials are also scheduled to share their thoughts this week.
“Markets are still feeling the impact of the Fed’s hawkish tilt. Despite all the hawkish spin from last week, the Fed will still likely move in 2023 and that means the US economy could still see another 18 months of support,” said Oanda senior market analyst Edward Moya.
“Inflation concerns will likely moderate, with many traders needing hot prints at the end of the year to prove pricing pressures are becoming persistent. This week is filled with a swathe of Fed speak that could show many policymakers shift a step closer to the hawkish side,” said Moya.
The JSE all share and the top 40 lost 0.11% and 0.05%, respectively, with the former at 65,563 points. Industrial metals gained 0.91%. Retailers lost 1.18%, listed property 0.96%, financials 92%, precious metals 0.9% and banks 0.73%.
At 5.30pm, the Dow Jones industrial average was 1.53% firmer at 33,798 points. In Europe, the FTSE 100 gained 0.64%, France’s CAC 40 0.51% and Germany’s DAX 1%.
Earlier, the Shanghai Composite firmed 0.12%, while Hong Kong’s Hang Seng lost 1.04% and Japan’s Nikkei 225 3.29%.
Shares in cement maker PPC rose to an eight-week high despite the group reporting a plunge in profits.
The group said on Monday that its headline profit from continuing operations fell more than two-thirds in the year to end-March 2021, with the Zimbabwean dollar’s collapse against the rand offsetting the positive effects of resilient demand for key products in some of its markets.
The group’s share price leapt the most since April 1 2021, up 9.83% to R3.24, having more than doubled so far this year. Once one of the darlings of the SA investment landscape, the share peaked at R34.66 in 2007.
At 6.15pm, the rand had strengthened 1.12% to R14.2309/$, 0.68% to R16.9546/€ and 0.14% to R19.8093/£. The euro was 0.43% firmer at $1.1909.
Gold rose 1.06% to $1,782.60/oz and platinum 2.08% to $1,058.28. Brent crude gained 2% to $74.70 a barrel.
Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.
Please read our Comment Policy before commenting.