JSE poised for biggest monthly gain in about a year

The JSE could edge lower on Friday in line with global markets, but was poised for its biggest monthly gain in about year.

The rand, meanwhile, continues to trade erratically against the US dollar as it swung from R14.70/$ on Monday to R15.14/$ in early trade on Friday.

The weaker currency has the potential to stoke higher consumer inflation, which is turning to be a bugbear for central banks around the world in the context of the higher international oil prices.

Brazil, one of the major emerging market countries, on Thursday raised interest rates by 150 basis points, the biggest in nearly two decades to rein in double-digit inflation.

Brent crude was relatively flat on the day at $84.41 per barrel, having risen just more than 60% since the start of the year.

Sanlam Private Wealth senior portfolio manager Greg Katzenellenbogen said the markets probably have not yet priced in the potential rise in interest rates in the US, which could further weaken the rand.

The US Federal Reserve meets next week and is expected to provide a timeline for the reduction of its huge bond-buying programme, which propped up the markets over the past 18 months of the Covid-19 pandemic.

Elsewhere, the rolling power blackouts and its potential impact on the economy remains the central theme in SA.

Other commodity prices were moderately weaker, with platinum shedding 0.49% to $1,10.17.25/oz, but palladium rose 0.33% to $1,999.99/oz.

The recovery in platinum group metal prices in October boosted mining shares, which in turned lifted the all share index, which was up 6% over a one-month period, its biggest monthly increase since November 2020.

mahlangua@businesslive.co.za