The JSE looks set to open to mostly higher Asian markets on Wednesday morning, with the rand on track for a third day of gains, as investors digest the threat posed by the Omicron variant.

Global markets have been digesting news that the new variant may not be more deadly, but also the concern that current vaccines may not be fully effective.

The JSE and rand have been recovering this week, however, from Friday’s Omicron-induced sell-off and the local bourse needs to gain only 80 points, or about 0.001%, to reach the level it closed at last week Thursday.

The rand had gained 0.4% in morning trade on Wednesday, and at R15.80/$, is now firmer than the R15.96/$ it was trading at before omicron began dominating headlines. The local currency fell back below the psychologically important R16/$ on Tuesday, when it firmed 1.6%.

Commodities and most Asian markets were also positive on Wednesday morning, despite US Federal Reserve chair Jerome Powell saying overnight that policymakers will discuss speeding up tapering at their December meeting. 

“The price action this morning highlights that Omicron headlines continue to dominate intraday market direction, despite some major developments from Powell overnight,” said Oanda senior market analyst Jeffrey Halley in a note.

“European markets are likely to follow north Asia higher for exactly the same reasons and in an environment of schizophrenic tail-chasing, the only winner this week will be volatility,” he said.

In morning trade the Hang Seng was up 1.41% and Japan’s Nikkei 0.6%, while the Shanghai Composite had added 0.11%.

Tencent, which influences the JSE via the Naspers stable, had gained 2.18%.

Gold was up 0.17% to $1,777.24/oz while platinum had gained 1.04% to $948.01. Brent crude was 0.8% higher at $70.82 a barrel.

The corporate calendar is light on Wednesday, while in economic news Absa’s purchasing managers index (PMI) for November is due later. The index had slowed in October, as industrial action in the steel sector and load-shedding weighed, but it remained in expansionary territory.



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