JSE posts small gain despite solid session on Wall Street

The JSE recorded tentative gains on Tuesday despite a solid overnight session on Wall Street that was powered by Big Tech.

Wall Street typically sets the tone for other global markets because it’s the biggest and highly liquid.

Still, the JSE was muted in midmorning trade after several days of hefty losses driven largely by commodity-linked shares.

The all-share was up less than 0.1% at 74,151.4 points at 11.42am as platinum group metal and gold shares posted small gains.

Banks and insurers were mostly higher after faring reasonably well in 2023 despite pervasive concerns about the growth outlook. The banking index is up 9% over the past year.

Domestically orientated industrials shares were patchy but appeared to have found a bottom in December after falling sharply over the past year, partly due to the fallout of the electricity shortfall.

Europe’s leading markets slipped into the red after opening modestly higher, despite the broadly positive picture from Asia.

In the US, the Nasdaq closed 2.2% stronger on Monday, boosted by technology shares, including Nvidia Corporation, which surged 6.4% to a record high.

The release of December US consumer inflation figures on Thursday is most likely to dominate global market psychology as far as it relates to the outlook for interest rates.

“Our base case scenario is for a soft landing, in which growth slows to just below trend, a US recession is avoided, inflation falls towards central bank targets by the second half of the year, and the Fed cuts interest rates by 100 basis points,” Mark Haefelem, CIO of UBS Global Wealth Management, said in a note.

“We think growth headwinds in the US are unlikely to lead to higher precautionary savings, and that inflation should fall at a more gradual pace.”

The rand was 0.22% weaker at 18.6501 by 11.30am, having depreciated by 7.7% in 2023.

mahlangua@businesslive.co.za