The JSE was little changed on Tuesday, with global peers mixed as investors focused on fresh inflation reports in the US.
The producer price index (PPI) rose 0.5% in April, above the market expectation of 0.3%. However, inflation concern was partially mitigated by a revised 0.1% decline in March, reported Bloomberg.
The PPI report is important as its components feed directly into the core personal consumption expenditure (PCE) price index, the Federal Reserve’s favourite inflation gauge.
The PPI data comes a day before Wednesday’s consumer price index (CPI) and will give investors fresh insights into the Fed’s future monetary direction. Markets expect an increase of 0.4% from the previous month, or an increase of 3.4% year on year.
Investors have been hopeful that the Fed will deliver at least one interest rate cut in 2024. Fed chair Jerome Powell said earlier in May that the central bank’s next move was “unlikely to be a rate hike”, despite the previous inflation report coming in hotter than expected.
“As part of the markets’ monitoring of inflation, there is a bit of caution as traders stayed away from taking any major positions ahead of Wednesday’s highly anticipated US CPI release,” Citadel Global director Bianca Botes said.
The JSE all share and the top 40 were little changed, with the former at 78,633 points.
At 5.40pm, the Dow Jones industrial average was little changed at 39.426 points and the S&P 500 had gained 0.14%. In Europe, the FTSE 100 added 0.22% and France’s CAC 40 0.25%, while Germany’s DAX was unchanged.
MTN was the third-worst performer on the local bourse, with its share price falling 8.5% to R84.82 after the company said its service revenue fell 18.8% in the first quarter due to the challenging macro environment.
The group also revised down its expected capex (ex-leases) deployment for 2024 to R28bn-R33bn due to a reduction in expected spend by MTN Nigeria.
The rand broke a three-day winning streak on the day, reaching an intraday worst of R18.48/$. At 5.50pm, the rand had weakened 0.36% to R18.4183/$, 0.64% to R19.9345/€ and 0.64% to R23.1992/£. The euro was 0.28% firmer at $1.0822.
Gold gained 0.41% to $2,347.14/oz, while platinum rose 2.89% to $1,040.60/oz. Brent crude was down 1.38% to $82.21 a barrel.
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