Tech heavyweights Naspers and Prosus led the gains on the JSE on Wednesday, and European markets climbed as investors welcomed comments by the US Federal Reserve chair Jerome Powell.
The JSE all share closed at a record high — gaining the most in more than a month — with miners and Sasol also pushing the index higher.
In testimony to the US Congress on Tuesday, Powell pledged that the Fed “will do what's needed” to rein in inflation, and reiterated his expectation that supply chain disruptions which have driven up prices would abate.
Powell has said the US economy is no longer needs substantial stimulus, further playing down the expectation of rapid interest rate increase in early 2022, as the labour market in the world’s largest economy recovers.
The prospect of less accommodative monetary policy has weighed on global markets for more than a year as policymakers grapple with inflation that is proving a more persistent than expected.
“After a tech-led sell-off in the US at the start of 2022, major indices in the world’s largest economy look to be rebounding from oversold territory following less hawkish commentary from Powell,” said IG senior market analyst Shaun Murison.
“This suggests that while monetary tightening is on the cards, conditions are still considered favourable for equity markets.”
The JSE all share soared 2.59% to 75,884.75 points, with industrial metals jumped 5.04%, resources 4.53%, and precious metals 2.86%. The top 40 surged 2.83%.
Naspers soared 9.3% to R2,680 — its best one-day gain since August 10 — and Prosus added 6.49% to R1,394.75, the most in four weeks. Sasol was up 6.89% to R285.40, its biggest gain since November 23.
“Stock markets were in positive territory on Wednesday after a reassuring appearance from [Powell] However ... sentiment is clearly very fragile and it may not take much to tip investors over the edge again ” said Oanda senior market analyst Craig Erlam.
“All in all, it was a masterful performance really, leaving the bowls neither too full nor too shallow; but just right from the financial market’s perspective.”
The mood was muted in the US, with the Dow Jones industrial average down 0.13% at 36,204.29 points. The broader S&P 500 was 0.15% firmer.
At 6.13pm, the rand had strengthened 1.11% to R15.3526/$, 0.55% to R17.5362/€ and 0.65% to R21.0151/£. The euro was 0.48% firmer at $1.1421.
Gold was little changed at $1,822.45/oz, while platinum gained 0.74% to $982. Brent crude firmed 0.98% to $84.58 a barrel.
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