The JSE closed firmer despite mixed global markets, as investors weighed tighter Covid-19 lockdown restrictions in Europe against US President Joe Biden’s decision to stick with Jerome Powell as the Federal Reserve chair for a second term.
Investors have welcomed the news of Powell’s renomination, which still has to be confirmed by the US Senate. The move is seen as comforting to investors as the world’s biggest economy tries to emerge from the Covid-19 pandemic, while battling inflation levels not seen in decades.
The local bourse hovered near record highs, with Barloworld, precious metals and banks the main features on the day.
Meanwhile, resurgent Covid-19 cases in Europe continue to cast a shadow over world markets, with Austria reimposing full lockdown restrictions, raising concerns about whether other countries in the region will follow suit.
Travel and leisure stocks, which are most sensitive to Covid-19 restrictions, fell in Asia.
“Europe is a key part of the global economic recovery and that will remain a major headwind for global equities if more countries go into lockdown mode,” said Oanda senior market analyst Jeffrey Halley.
“Investors’ anxiety about inflation and interest rates has been exacerbated by the prospect of lockdowns in Europe, following Austria’s announcement on Friday,” said Halley.
“All things considered, it’s impressive that stock markets are already trying to build upward momentum again. Investors are battling on and holding their ground, but the headwinds are becoming more fierce,” he said.
Shares in Barloworld rose the most since September after it rewarded shareholders with a special dividend as the group returned to full-year profit, boosted in part by the equipment business and a turnaround in its car rental unit.
The share price rose 7.54% to R145.18.
The JSE all share gained 0.7% to 70,866 points and the top 40 0.8%. Industrial metals added 2.09%, banks 1.5%, resources 1.22%, financials 0.92% and industrials 0.33%.
At 5.55pm, the Dow Jones Industrial Average was 0.67% firmer at 35,841 points. In Europe, the FTSE 100 had gained 0.64% and France’s CAC 40 0.33%, while Germany’s DAX was unchanged.
Earlier, the Shanghai Composite added 0.61%, while Hong Kong’s Hang Seng lost 0.32% and Japan’s Nikkei was little changed.
At 5.50pm, the rand had weakened 0.28% to R15.7610/$, while it was little changed at R17.7247/€ and R21.1214/£. The euro was 0.3% weaker at $1.1245.
Gold lost 1.59% to $1,816.75/oz and platinum 0.1% to $1,033/oz. Brent crude was 1.58% firmer at $79.68 a barrel.
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