JSE could benefit from positive global sentiment amid local third-wave threat
US officials have downplayed the threat of inflation, again, but locally SA is grappling with a surge in Covid-19 numbers
The JSE looks set to open to positive Asian markets on Wednesday morning, with global sentiment upbeat after US Federal Reserve speakers once again played down the threat of inflation to the world’s largest economy.
US Fed chair Jerome Powell said during testimony before his country’s legislators that it was extremely unlikely the US will face the same kind of inflation problems it experienced in the 1970s. He said he expected to see strong job creation towards the end of the year.
The tech-heavy US Nasdaq closed at a record high on Tuesday, while in morning trade on Wednesday most Asian markets were trading higher.
Locally, news is less positive, with Gauteng grappling with a severe spike in Covid-19 infections that has prompted reports of shortages of hospital beds and oxygen.
President Cyril Ramaphosa said on Tuesday the numbers pointed to a need to review lockdown restrictions.
In morning trade, the Hang Seng was up 1.46% and the Shanghai Composite 0.46%, while Japan’s Nikkei was flat.
Tencent, which often gives direction to the local bourse via the Naspers stable, had risen 1.13%.
Gold was up 0.17% to $1,781.30/oz while platinum fell 0.11% to $1,079.80. Brent crude was 0.83% higher at $75.28 a barrel.
The rand was flat at R14.26/$.
Accelerate Property Fund is due to report its results for the year to end-March later. It said in a recent trading update that distributable income per share was likely to fall by at least 15% amid relief for tenants. The landlord does not expect to make a distribution.
Local consumer inflation data for May is due out later on Wednesday and is expected to push past the 4.5% midpoint of the Reserve Bank’s 3%-6% target band for the first time since February 2020. Analysts have noted core inflation — which excludes volatile fuel and food components — remains contained.
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