The JSE was on track to break a four-day losing streak on Wednesday morning, with the rand also firmer as a global recovery gained momentum.
Market participants are divided about whether Monday’s plunge was driven by prospects of a recession in the US or if it was just market correction.
Bloomberg reported that many investors are viewing Monday’s sell-off as long overdue in a market that’s reached high valuations and new records, with some cautioning that there may be more pain.
Despite the global recovery gaining momentum, RMB head of forex execution Matete Thulare said sentiment in emerging markets remained fragile as concern grew that the US was potentially heading for a recession.
“Adding to the fragile sentiment is Chinese data showing that its trade balance shrank in July by more than forecast, while exports were lower as eurozone trade tariffs on electric vehicles came to fruition.”
At 10.51am, the rand had firmed 0.72% to R18.3417/$, 0.68% to R20.0376/€ and 0.5% to R23.3154/£. The euro was little changed at $1.0923.
“Again, with little in the way of data out, we look for consolidation and ranges of R18.25/$ to R18.55/$ trade to continue for now,” Thulare said.
At 11.10am, the JSE all share had gained 0.87% to 80,117.73 points and the top 40 was up 0.85%. Retailers had added 1.41%, industrials 1.3%, precious metals 0.81%, food producers 0.8%, financials 0.62%, SA listed property 0.61%, banks 0.43% and resources 0.37%. Industrial metals was down 0.31%.
At the same time in Europe, the FTSE 100 had gained 0.79%, France's CAC 40 1.4% and Germany's DAX 1.08%.
Earlier in Asia, the Shangai Composite was little changed, while Hong Kong’s Hang Seng added 1.26% and Japan’s Nikkei 1.19%.
In commodity markets, gold gained 0.17% to $2,393.17/oz and platinum 0.6% to $918.1/oz. Brent crude was 1.41% firmer at $77.14 a barrel.
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