The JSE traded firmer on Thursday morning, with the rand poised to extend gains as encouraging US inflation reports revived hopes of interest rate cuts by the US Federal Reserve.
Wednesday’s December consumer inflation report showed headline consumer inflation was in line with market expectations year on year, while core consumer inflation slowed, coming in below estimates. The decline in core inflation suggests easing price pressures.
This report followed Tuesday’s US producer inflation release, which fell short of economists’ expectations, while core PPI remained flat.
“Markets tracked Wall Street’s rally after US inflation data met expectations, renewing hopes for rate cuts and lifting global stocks,” Citadel Global director Bianca Botes said.
At 10m, the JSE all share had gained 0.43% to 83,876 points and the top 40 was 0.47% firmer.
At the same time in Europe, the FTSE 100 was up 0.63%, France’s CAC 40 1.39% and Germany’s DAX 0.25%.
Earlier in Asia, the Shanghai Composite gained 0.28%, Hong Kong’s Hang Seng 1.23% and Japan’s Nikkei 0.33%.
Investors were also eagerly anticipating the release of more big bank earnings reports in the US, following a string of impressive results from some of the country’s largest financial institutions.
Notably, Goldman Sachs saw its profit more than double, while JPMorgan and Wells Fargo both reported substantial profit increases that exceeded forecasts. Citigroup swung back to profitability, beating consensus expectations for per-share earnings, and Bank of New York Mellon also surpassed forecasts with an 11% increase in revenue, according to Bloomberg.
At 10.15am, the rand had firmed 0.15% to R18.83/$, while it had weakened 0.24% to R19.39/€ and 0.12% to R22.99/£. The euro was little changed at $1.02.
Gold lost 0.47% to $2,699.93/oz and platinum 2.3% to $952.9/oz. Brent crude was 0.17% weaker at $82.17 a barrel.
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