The JSE closed weaker on Wednesday but was still near its record high as investors turned their immediate attention from the Omicron variant of Covid-19 to the Fed and accelerated tapering.
With a lack of fresh news on the day, global equity markets also took the time to catch their breath after Tuesday’s strong rally that was sparked by new that the Omicron strain might not be as severe as initially feared.
Still, there is still plenty of concern about how markets will react if the Fed does decide to quickly end its easy monetary policy.
Markets are also monitoring rising geopolitical tensions as indirect talks between the US and Tehran over Iran’s nuclear programme were set to resume this week.
Tensions between Western powers and Russia over Ukraine also remained high after President Joe Biden warned Russian President Vladimir Putin on Tuesday that the West would impose “strong economic and other measures” on Russia if it invades Ukraine. Putin has demanded guarantees that Nato won’t expand farther eastward.
“I have stated that V for volatility would be the winner in December, rather than directional momentum, and I believe that still holds true. Some serious non-virus risk points are looming,” said Oanda senior market analyst Jeffrey Halley.
The JSE all share slipped 0.73% 72,403.88 points, led by precious metals, which were down 3.16%, resources 2.13%, and industrial metals 1.64%. The top 40 ended the day 0.78% lower.
Shares in Rand Merchant Investment Holdings (RMIH) rose 8.87% to R45.92 — the most since September — after the company announced the sale of its 30% stake in UK short-term insurer Hastings Group to Nordic insurer Sampo for R14.6bn, thereby doing away with a planned rights issue. The sale gives Sampo outright ownership of Hastings.
The deals means RMIH will book an R8.7bn profit after settling Hastings’ debt and receiving a dividend from Outsurance, which is 89.1% owned by RMI and which also had a stake in Hastings.
At 6.55pm, the Dow Jones industrial average was 0.19% lower at 35,650.08 points. In Europe, London’s FTSE 100 closed little changed at 7,337.35 points, while Germany’s DAX eased 0.8% and France’s CAC 40 was down 0.72%.
At 5.46pm, the rand had strengthened 0.97% to R15.6693/$, 0.36% to R17.7549/€ and 1.05% to R20.7857/£. The euro was 0.58% firmer at $1.1328.
Gold lost 0.16% to $1,781.24/oz, while platinum was little changed at $956.50. Brent crude was flat at $75.23 a barrel.
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