JSE PREVIEW: JSE likely to remain in narrow range ahead of Fed meeting

The JSE will mostly likely trade in a narrow range on Wednesday ahead of the US Federal Reserve’s meeting in the evening at which it will provide guidance on future interest rates, given the receding inflation.

The markets, which are inherently forward looking, have already priced in the 25 basis point (bp) increase in policy rate in Wednesday night’s meeting by world’s most influential central bank.

In Asia, stocks were patchy on the day, but finished January with solid gains, particularly in Hong Kong, where technology stocks outperformed.

In SA, the rand held steady against the dollar after state-owned utility Eskom ramped up power cuts, dimming the country’s economic prospects.

The rand decoupled from the global risk-on scenario that played for the better part of January. It is down just more than 2% against the dollar at a time when the latter currency is under pressure relative a basket of other currencies.

However, SA Inc stocks have been sanguine on balance against a backdrop of deteriorating conditions for businesses with regards to the frequent power cuts.

Banks, retailers and other domestic industrial stocks have held up reasonably well during January but face increased operating costs.

Grocery retailer Shoprite spent R560m on diesel in the six months to January for its backup generators to supply power to stores during load-shedding.

In commodity markets, Brent crude was little changed at $85.65 a barrel and the gold price was steady at $1,925.70/oz.

mahlangua@businesslive.co.za