The JSE was firm, but off its intraday best levels, amid mixed global peers on Monday as the rally sparked by an improved US interest rate outlook seemed to lose some steam.
Risky assets received a boost on rising hopes that the US Federal Reserve could be done with its interest rate hikes to bring inflation under control after a jobs report on Friday showed employers hired fewer workers in October than what the markets had anticipated.
“Markets are struggling to maintain the momentum from the second half of last week with the rally running on fumes after the Fed and NFP (non-farm payrolls) boost,” said Oanda senior market analyst Craig Erlam. “”
“Investors got everything they wanted from the Federal Reserve and the jobs report. On the other hand, the Fed is desperate to take some heat out of the labour market as it believes it’s required to get inflation sustainably back to 2%,” said Erlam.
“That said, the response in the second half of [last] week didn’t look particularly sustainable. It was arguably over the top under the circumstances but investors have been eagerly awaiting the turning point in the data. Perhaps they’ve been premature on this occasion but data over the coming weeks may prove otherwise.”
The JSE all share gained 0.6% to 73,293.69 points and the top 40 added 0.65%. The precious metals and mining index rose 3.26%, resources 2.39% and industrial metals 1.62%. Food producers lost 0.55%, while banks and financials both shed 0.46%.
At 6pm, the Dow Jones industrial average was 0.12% firmer, the FTSE 100 was little changed, while France’s CAC 40 lost 0.39% and Germany’s DAX eased 0.3%.
Investors will be watching addresses by Fed chair Jerome Powell, who is scheduled to speak twice in the coming days. Powell’s address comes after the US central bank kept rates unchanged for a second straight meeting last week. Powell adopted a slightly less hawkish tone at the post-interest rate media briefing while maintaining a cautious position on inflation and interest rates. Investors are hoping to hear what the central bank has to say in light of the recent jobs data.
The rand broke a seven-day winning streak, but held steady at its best level in three-months. At 5.59pm, it had weakened 0.23% to R18.2941/$, 0.38% to R19.6547/€ and 0.46% to R22.6651/£. The euro was 0.13% firmer at $1.0743.
Gold lost 0.52% to $1,981.66/oz and platinum 1.35% to $918.90/oz. Brent crude was 0.81% firmer at $85.81 a barrel.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.