The JSE is facing higher markets from Japan as investors are upbeat that the US Federal Reserve will slow its interest rate hikes.
“The US inflation improvement is working magic and reducing fears of most other structural impediments, including micro impulses from earnings as calmer seas ahead have investors sailing to the soft landing camp,” SPI Asset Management managing partner Stephen Innes wrote in a note on Tuesday.
Meanwhile, markets in mainland China and Hong Kong remain closed as the lunar new year holiday continues.
The Nikkei in Japan gained 1.61%, helped by gains on Wall Street overnight and the Bank of Japan sticking to its policy of low interest rates.
The JSE touched a record high on Monday, with global peers firmer as investors bet on a potential slowdown in rate hikes from the US Federal Reserve and brace for a data-packed week locally and abroad.
The JSE all share index gained 1.08% to 80,128 points, having touched an intraday best of 80,358.
Investors are betting that the Fed will slow the pace of its rate hikes after economic data last week, such as retail sales, showed consumers are under pressure and past rate hikes seem to be working.
The JSE top 40 index added 1.14%, while banks gained 1.8%, financials jumped 1.58%, retailers were up 1.5%, industrial metals collected 1.16%, resources garnered 1.07% and the precious metals and mining index advanced 0.59%.
Local markets are also waiting to hear what the SA Reserve Bank will say on Thursday in its latest interest rate announcement, with a hike expected.
US markets rallied on Monday, with the Nasdaq climbing 2.01%, the S&P 500 1.19% and the Dow Jones 0.76%.
In commodities, the price of platinum rose 0.26% to $1,049.70 and gold 0.10% to $1,932.51/oz, while Brent crude was flat at $88.02 a barrel.
The rand lost some footing against the dollar on Tuesday morning, trading at R17.20/$.
No corporate releases are expected on Tuesday.
On the economics side, the SA Reserve Bank will publish at 9am November’s leading business cycle indicator, which offers a projection of SA’s economic growth cycle for the next six to 12 months.
The leading business cycle indicator was 123.0 points in October, reflecting a 0.9% monthly decline and was 1.9% lower than a year ago. This is consistent with an elevated risk of subdued GDP growth outcomes and an uncertain environment for economic predictions, FNB said.
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