The global market rally that saw the JSE recover from its worst levels in three months this week, paused on Friday as investors digested central bank decisions and developments in Ukraine.
Investors continued to digest the interest rate hikes from both the US Federal Reserve and Bank of England and the war between Russia and Ukraine, which shows no signs of abating. Meanwhile, a rise in Covid-19 cases in Europe stemming from an “emergent subvariant” has dampened sentiment in that region.
The JSE all share rose 1.58% for the week, helped by gains in the banks, financial, and industrial indices, which were up 4.72%, 4.58% and 4.07% respectively. Industrial metals, resources, and the precious metals indices fell2.96%, 2.53% and 2.06% respectively this week.
Investors are uneasy that there is little sign of a ceasefire between Russia and Ukraine as the conflict heads into a fourth week.
“Investors are opting for caution at the end of another strong rebound week,” said Oanda senior market analyst Craig Erlam. “Despite the week’s big gains, they didn’t come without their share of volatility, which has showed no signs of tempering any time soon.”
“I’m not sure what exactly is more appealing about equity markets right now. The aggressive tightening cycles of multiple central banks around the world? Sky-high inflation? Or is it slight relief at negotiations while Putin continues to commit atrocities in Ukraine?,” said Erlam. “I can’t help but think we should take apparent progress with a pinch of salt.”
On Friday, the JSE all share gained 0.98% to 74,847 points and the top 40 index added 1.04%. The all share is 3,450 points from the record high of 78,297 it reached less than three weeks ago.
At 5.55pm, the Dow Jones Industrial Average was 0.39% weaker at 34,344 points. Markets were mixed in Europe and Asia.
Shares in Alexander Forbes surged 24.47% to R4.68 on Friday, their best day on record. That was after it announced that New York-listed investment manager Prudential Financial had reached a deal to pick up about a R1.05bn, or 15% stake, and was looking to more than double it.
At 6.02pm, the rand had weakened 0.53% to R14.9866/$ and 0.73% to R19.7331/£, while it was unchanged at R16.5495/€. The euro fell 0.45% to $1.1041.
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