The JSE was firmer on Thursday morning, while its global peers were mixed as minutes from the latest US Federal Reserve policy meeting confirmed that US rates would probably remain higher for longer.
The minutes from the latest federal open market committee (FOMC) showed a hawkish Fed committed to the fight against inflation, but will be driven by upcoming economic data releases.
“The Fed’s stance is very much in line with what markets expected,” said TreasuryOne currency strategist Andre Cilliers. “Markets are now pricing in a terminal rate of 5.5%, meaning that we should see three further 25-basis-points rate hikes, but this will be driven by US economic data,” added Cilliers.
At 10.30pm, the JSE all share had gained 0.61% to 78,643 points and the top 40 was up 0.6%. Industrials had added 0.84%, financials 0.8%, banks 0.65% and industrial metals 0.23%.
At the same time in Europe, the UK’s FTSE 100 was down 0.19%, while France’s CAC had gained 0.37% and Germany’s DAX 0.67%.
Earlier in Asia, the Shanghai composite lost 0.11%, Hong Kong’s Hang Seng 0.24% and Japan’s Nikkei 1.34%.
Locally, investors are keeping a close eye on what will transpire at Eskom after news that the group CEO Andre De Ruyter will be parting ways with the power utility, after he gave a TV interview in which he accused high-level ANC members of corruption within Eskom and made a scathing attack on the government's involvement in the power utility.
Investors welcomed Eskom’s rescue plan outlined in finance minister Enoch Godongwana’s budget address on Wednesday, in which he announced a three-year debt relief programme worth R254bn for the stricken power utility, though it comes with strict conditions.
“One of the most important outcomes of Godongwana’s budget is that it has given the market greater clarity and certainty about the government’s plan to address its Eskom debt,” said Citadel Global chief investment officer George Herman.
“The mere fact that we have some form of certainty as to government's approach to the Eskom bailout is a major positive, despite it being a painful exercise.”
“Initially, currency and bond markets reacted positively but gave back some gains as the facts were digested. Pressure on bonds and the rand remains as we await the greylisting announcement on Friday,” said Herman.
At 10.24am, the rand had weakened 0.54% to R18.3243/$, 0.59% to R19.4505/€ and 0.74% to R22.0978/£. The euro was little changed at $1.0613.
Gold was little changed at $1,827.02/oz, while platinum gained 0.2% to $951.90/oz. Brent crude was 0.64% firmer at $80.78 a barrel.
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