JSE breaks three-day losing streak

The JSE broke a three-day losing streak on Thursday, supported by modest rises in the main indices, though it ended off its best levels for the day as US consumer inflation rose more than expected in December.

The US consumer price index (CPI) rose 0.3% last month after nudging up 0.1% in November, Reuters reported. In the 12 months through December, the CPI rose 3.4% after increasing 3.1% in November. Economists polled by Reuters had forecast the CPI would gain 0.2% on the month and climb 3.2% year on year.

The data raised concerns the Federal Reserve could delay cutting interest rates beyond the current expectation of March.

“If today’s report is the start of an upward pattern, there is a good chance that the Fed will delay rate cuts until later than previously expected,” Reuters reported, citing Charles Schwab MD Richard Flynn.

The JSE all share index closed up 0.34% at 73,834.28 points, while the top 40 added 0.36%. The banks index rose 0.59%, industrials 0.45%, financials 0.38%, and the precious metals and mining index collected 0.27%.

Stocks have had a relatively inauspicious start to the year after a strong showing in December, and with very little local company news to drive markets investors have focused on the global interest rates trajectory. Investors, previously hopeful that rate cuts in the US are just around the corner, have been reconsidering the timeline.

The rand continued to trade sideways in line with subdued emerging markets and a lack of clarity about Fed rate cuts, said Andre Cilliers, currency strategist at TreasuryONE.

At 6.15pm the local unit was little changed at R18.6606/$, but firmed 0.41% to R20.4203/€ and 0.48% to R23.712/£.

At 6.39pm, the Dow Jones industrial average was down 0.66%, while the broader S&P 500 fell 0.8%. In Europe, London’s FTSE 100 closed 0.94% weaker, France’s CAC 40 was off 0.52% and Germany’s DAX shed 0.88%.

Gold was slightly firmer on the softer US dollar and at 5.50pm was up 0.3% at $2,031.15/oz, while platinum was 0.17% softer at $918.90.

Brent crude rose 2.8% to $78.78 a barrel after militants seized an oil tanker off the coast of Oman, raising the prospect of escalating tensions in the Middle East.