The JSE ended lower on Thursday, but off the session’s lows, and the rand rebounded as investors came to terms with a delay in with US interest rate cuts.
As widely expected the Federal Reserve kept interest rates steady after its meeting on Wednesday, with chair Jerome Powell highlighting the need to see inflation coming down “more sustainably towards” the central bank’s 2% goal.
The Federal Open Market Committee’s (FOMC’s) tone was cautious, not dovish, though markedly less hawkish than before, said Investec chief economist Annabel Bishop.
“The markets having centred on May as the first rate cut, but will digest the FOMC statement in the remainder of this week,” she said. “The market expectations for the first FOMC cut are unlikely to change materially; that is, be brought forward to the next meeting (on March 20), though US data releases in the interim will remain key.
“It remains likely the FOMC will not cut its interest rates before May at the earliest, potentially rather at its June meeting, and for SA the Reserve Bank is unlikely to cut before July,” Bishop added.
The JSE all share lost 0.12% to 74,469 points — recovering from a decline of more than 1% earlier — while the top 40 was down 0.15%. Precious metals gained 1.58% and industrials 0.45%. Industrial metals lost 1.51%, food producers 1.31%, banks 1.28%, financials 0.87%, retailers 0.68% and resources 0.28%.
At 6.18pm, the Dow Jones industrial average was unchanged at 38,148.81 points, though the S&P 500 was up 0.24%. Markets in Europe closed lower.
Data on Thursday shows eurozone headline inflation eased slightly in January, while core figures declined less than expected. Annual headline price rises came in at 2.8%, in line with the median forecast of economists surveyed by Reuters. Inflation stood at 2.9% in December, up from 2.4% in November, largely due to the winding down of energy price support measures, according to Reuters.
Core inflation dipped to 3.3% in January from 3.4% in December — Reuters forecast indicated a fall to 3.2%.
Shares in Africa’s largest pay TV operator, MultiChoice, jumped almost 27% to R94.95 — the biggest one-day gain on record — after confirming it had received a buyout offer from French entertainment giant Canal+.
At 6pm, the rand had strengthened 0.47% to R18.5969/$, 0.4% to R20.1348/€, and 0.71% to R23.5809/£. The euro was less than 0.1 firmer at $1.0821.
Gold gained 0.53% to $2,049.41/oz, while platinum lost 0.44% to $917.48/oz. Brent crude was 0.86% firmer at $81.33 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.