JSE weakens, with global peers mixed
The JSE closed weaker amid mixed global peers on Tuesday as US markets reopened after being closed on Monday due to a public holiday.
Inflation remains a key theme and investors are generally turning less optimistic that the Federal Reserve will implement interest rate cuts soon. Stocks traded cautiously as another round of better-than-estimated company profits failed to dispel uncertainties about monetary policy, with bets on imminent rate cuts dissipating.
This week investors will look out for the latest minutes from the Fed, due to be released on Wednesday, to gain insight into the future path of interest rates. A slew of Fed officials are expected to speak this week, with investors hoping to get more clues on the central bank’s inflation and interest rates outlook.
“After last week’s surprisingly hot consumer and producer inflation readings, traders have given up hopes of rate cuts in the first half of this year,” said Oanda senior market analyst Craig Erlam.
Meanwhile, the People’s Bank of China slashed its five-year loan prime rate by 25 basis points to 3.95%, the largest reduction since a revamp of the rate was rolled out in 2019. However, the country’s mortgage reference rate failed to dispel concerns about the world’s second-largest economy, reported Bloomberg.
LITTLE JOY
“Markets have found little joy in China’s move to cut its five-year loan prime rate as they seek signs of fiscal stimulus” that glut, said will Citadel target Global the consumption director Bianca Botes. “Concerns about the slowing of the Chinese economy continue to weigh on investors.”
The JSE all share lost 0.86% to 72,946 points, with major indices mostly weaker, except precious metals and food producers.
The top 40 was down 0.87%. At 6.05pm, the Dow Jones industrial average was little changed at 38,610 points, while markets were mixed in Europe.
Shares in transport and logistics group Super Group led the losses on the local bourse — falling 10.93% to R25.34, the most since November 2020 — after the company said it expected its profits to have declined 16% in the six months ended December.
The company said on Tuesday the fall in profits was partly due to softening demand for vehicles in markets such as the UK, where interest rates rose to new highs in 2023.
The rand reversed the session’s losses, touching an intraday best of R18.87/$. At 6.03pm, the rand had strengthened 0.25% to R18.9171/$, while it had weakened 0.1% to R20.4657/€ and 0.27% to R23.9393/£. The euro was 0.38% firmer at $1.0818.