The JSE gained for a second straight session on Thursday while the rand maintained its recent strength against the dollar, holding below R15 after the Fed and Bank of England (BoE) raised their benchmark interest rates.
The central banks’ moves were widely anticipated, which prvided the markets with some comfort, as did China’s promise of support for financial markets and reports that there have been positive talks between Russia and Ukraine. Still, there’s little sign of a ceasefire as Russia’s invasion of its southwestern neighbour heads into its fourth week.
The Fed raised interest rates for the first time since 2018 on Wednesday and signalled six more hikes by the end of the year, saying the US economy was strong enough to absorb the tighter monetary policy.
The BoE followed suit on Thursday raising its key rate for the third straight policy meeting, taking borrowing costs back to their pre-pandemic level.
The rand touched an intraday best of R14.8450/$ — the strongest level since October 27, and was trading 0.31% firmer at R14.8718/$ and up 0.39% at 19.5695 6.50pm. But it was down 0.49% at R16.538/€. The euro was 0.88% stronger at $1.1129.
The yield on benchmark R2030 government securities fell 4 basis points to 9.59%, indicating good buying interest since yields on bonds move inversely to their prices.
Kremlin spokesperson Dmitry Peskov on Thursday dismissed reports of substantial progress in peace talks with Ukraine, blaming Kyiv for slowing the negotiations.
On Wednesday, the Financial Times reported that both countries had made “significant progress” on a peace plan and Russian withdrawal from Ukraine. That FT report helped stocks rally;
“As ever, we need to take commentary coming from the Kremlin with a pinch of salt, both good and bad, but the latest comments have come as a blow to the markets,” said Oanda senior market analyst Craig Erlam.
“Given the difference between the rhetoric and the actions of the Kremlin over the last couple of months, I’m not filled with hope and this presents a major downside risk for the markets,” he added.
The JSE all share gained 0.87% to 74,124.27 points and the top 40 was up 0.89%. Precious metals added 4.06% and resources 1.85%, while banks lost 0.79% and financials 0.5%.
At 7.32pm, the Dow Jones industrial average was up 0.66% at 34,286.25 points. European market were firmer — except for Germany’s DAX — as were Asian markets.
Gold gained 0.88% to $1,942.79/oz and platinum 0.68% to $1,029.50. Brent crude was up 8.89% to $106.67 a barrel.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.