The JSE firmed in line with global peers on Wednesday, with investors focused firmly on Thursday’s US inflation report, which many expect to be positive.
The JSE and rand held steady for most of the session with the benchmark all share index touching a record high of 78.925 points in intraday trade. It ended the session 0.67% higher at 78,522 points — the heavyweight top 40 added 0.77% — boosted by industrial metals (1.3%), industrials (1.1%) and resources (0.9%). Food producers, banks and financials were lower, easing 1.07%, 0.53% and 0.4%, respectively.
The release of US consumer price index (CPI) data on Thursday will give markets further insight into the US economy and offer more clarity on the Federal Reserve’s rate path.
“Investors remain in an upbeat mood going into the US inflation report, buoyed still by the December jobs report and the prospect of the economy being less squeezed by interest rates,” said Oanda senior market analyst Craig Erlam.
Fed chair Jerome Powell didn’t provide much new insight in an address at Sweden’s Riksbank on Tuesday, and avoided any comment on monetary policy and the economic outlook.
“Fed chair Jerome Powell may have refrained from commenting on the monetary policy outlook on Tuesday, but the chances are he wouldn’t have said anything investors would have liked even if he had addressed it. It’s been clear from other commentaries that policymakers are sticking to the hawkish script,” Erlam said.
“Another good inflation number on Thursday could change that as the trend has already been very encouraging and the jobs data that appeared to throw a spanner in the works last month has since been revised out,” he said.
“From an investor perspective, it would take something pretty terrible — the inverse of what we were treated to on Friday — to really rock the boat.”
At 7.13pm, the Dow Jones industrial average was up 0.32% at 33,810.37 points while the S&P 500 had gained 0.69%. The UK’s FTSE 100 closed 0.4% firmer, France’s CAC 40 added 0.8% and Germany’s DAX 1.17%.
Telkom rose 9.26% to R35.38 — the most in almost six months — after news that it and Rain had abandoned merger talks. Telkom, which is partially owned by the government, has been the centre of interest from several competitors looking for growth in the SA market.
At 6.50pm, the rand had strengthened 0.56% to R16.9351/$, 0.37% to R18.212/€ and 0.83% to R20.5457/£. The euro was 0.19% firmer at $1.0754.
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