The JSE closed little changed on Thursday after SA researchers announced the discovery of a new strain of Covid-19 and investors studied the minutes of the US Federal Reserve’s most recent meeting.
The coronavirus variant, called B.1.1.529, has dozens of mutations that may make it more contagious and more adept at evading the protection conferred by vaccines or prior infection. It is driving the resurgence of cases in Gauteng — which has reported a rapid rise in cases in the past fortnight — and is likely to be circulating in other provinces.
“While SA is not yet in a fourth wave, it may be beginning and could become more apparent in December,” said Investec chief economist Annabel Bishop. “However, restitution of lockdown restrictions would be very negative for the SA economy as vaccination progress lags.”
Rising cases of earlier variants of Covid-19 in Europe remain a worry for investors too. Germany is now considering a full lockdown to help tame the latest outbreak, just a few days after Austria implemented a full national lockdown.
In the US, the Federal open market committee notes released on Wednesday evening show that the US central bank is ready to accelerate its timetable for slowing asset purchases and raising interest rates.
“The FOMC’s November meeting minutes showed signs that the members of the committee were already discussing the potential to ramp up asset purchase tapering even before the recent high inflation prints,” said RMB economist Siobhan Redford.
“Thus, with higher inflation and the evidence that US monetary policymakers seem willing to increase the pace of tapering, markets are now expecting this to be announced at the Fed’s December meeting,” said Redford.
The JSE all share closed 4.21 points lower at 70,554.68, while the top 40 was 0.17% weaker. Retailers rose 2.19%, banks added 1.22% and financials were up 1.13%. Industrial metals fell 2.33% and resources shed 1.71%.
US markets are closed on Thursday for Thanksgiving, and will shut early on Friday.
In Europe, London’s FTSE 100 ended 0.33% higher at 7,310.37 points, Germany’s DAX added 0.25% and France’s CAC 40 was up 0.48%
Earlier in Asia, Japan’s Nikkei closed 0.67% firmer and Hong Kong’s Hang Seng added 0.22%, but the Shanghai Composite lost 0.24%.
At 6.35pm, the rand was little changed at R15.8933/$, 0.18% weaker at R17.8212/€ and 0.17% softer at R21.20341/£. The euro was 0.11% firmer at $1.1212.
Gold was little changed at $1,788.78/oz, while platinum gained 1.74% to $997. Brent crude was 0.4% weaker at $81.88 a barrel.
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