The JSE closed at a record high, buoyed by gains in tech-heavy Naspers and Prosus, and cordial talks between US President Joe Biden and his Chinese counterpart Xi Jinping.
The rand, though, fell victim to talk of a further interest-rate cut in Turkey that sent the lira sharply weaker against the dollar — as did most emerging-market currencies.
The all share gained for straight five sessions on Tuesday, reaching an intraday best of 71,049 points, before paring the gain to close 1.21% higher at 70,938.41 points. The top 40 added 1.26%, while precious metals rose 3%, industrials 1.55%, resources 1.53% and industrial metals 1.07%.
“We still seem to be caught between two strong counterforces, a strong earnings season providing the bullish case and a long list of downside risks — most notably inflation and interest rates,” said Oanda senior market analyst Craig Erlam “It’s notable that we’re seeing strong resilience despite all of the uncertainty around central banks.”
Naspers, which owns a portion of Tencent via its global internet arm Prosus, gained the most in more than a month, despite reporting in the afternoon that headline earnings for the six months to end-September could fall as much as 12%, partly due to higher finance costs.
In a separate statement on Tuesday, Amsterdam-listed Prosus also said headline earnings per share could fall as much as 7% on finance costs.
Naspers gained 4.72% to R2,775, while Prosus added 4.93% to R1,376.70.
At 6.53pm, the Dow Jones industrial average had gained 0.46% to 36,254.28 points after the previous day’s talks between Biden and Xi. While no breakthroughs were delivered, the cordial tone of their virtual meeting is seen as an indication that relations between the sides may be turning a corner.
The rand and other emerging market currencies fell in sympathy with Turkey’s lira, which dropped more than 2.8% as markets anticipate another rate cut in the policy rate by the country’s central bank, further undermining perceptions of the institution’s independence.
The bank has been under pressure from Erdogan, who has replaced its governor several times in the past year and has been pushing it to cut interest rates to boost lending and promote investment and economic growth, despite rising inflation.
At 5.49pm, the rand had weakened 1.92% to R15.5295/$, 1.69% to R17.61185/€ and 1.94% to R20.83807/£. The euro was 0.21% weaker at $1.13417.
Gold was little changed at $1,861.89/oz, while platinum lost 1.36% to $1,075.86. Brent crude was 0.55% weaker at $81.68 a barrel.
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