The JSE was little changed on Tuesday morning, while its global peers were mixed as investors assessed signs of easing tension between China and the US and the US Federal Reserve’s rate path outlook.
Fed vice-chair Lael Brainard said on Monday that the central bank should soon moderate the size of its interest-rate increases, signalling she favours slowing to a half-point hike as early as December. Her comments come after Fed governor Christopher Waller said the bank still had a long way to go before it would stop raising interest rates, despite last week’s cooling inflation report.
Investors expect Fed officials to opt for a half-point hike at their December 13-14 meeting after Fed chair Jerome Powell’s signal on November 2 that such a downshift was unlikely to happen soon.
Chinese foreign minister Wang Yi said the first face-to-face meeting with US President Joe Biden and was a “new starting point”. Bloomberg reported the tone of the meeting may lend additional support to China’s financial markets, which have been on a tear in November amid signs of a moderation in the nation’s Covid-zero policy and a property-market crackdown.
“Equity markets are looking mixed. While the rally is perhaps slowing a little after the strong gains of recent weeks, there doesn’t appear to be much appetite at this stage to bail on it,” said Oanda senior market analyst Craig Erlam.
“Everyone became much more optimistic after last week’s inflation report in the US but that appears to have quickly faded,” said Erlam. “Enormous downside risks remain around the global economy next year even if the Fed does pause its tightening a little sooner and perhaps that reality is kicking in again.”
At 10.45pm, the JSE all share and the top 40 were little changed, with the former at 72,783 points. Banks had lost 1.99%, financials 1.86% and precious metals 0.1%. Industrials had gained 0.71%, industrial metals 0.57% and resources 0.17%
At the same time in Europe, London’s FTSE 100 gained 0.12% and France’s CAC 40 0.31%, while Germany’s DAX was 0.11% weaker.
Earlier in Asia, Shanghai Composite gained 1.64%, Hong Kong’s Hang Seng 3.86% and Japan’s Nikkei 0.1%.
At 11.02am, the rand had strengthened 0.34% to R17.2120/$, while it had weakened 0.45% to R17.9121/€ and 0.14% to R20.3705/£. The euro was 0.79% firmer at $1.0407.
Gold lost 0.51% to $1,778.74/oz and platinum 1.19% to $1,029.10/oz. Brent crude was unchanged at $92.49 a barrel.
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