JSE pares gains as investors remain on edge

The JSE pared most of Wednesday’s mid-afternoon gains but still ended the day more than 0.5% higher, apparently taking its cue from Tesla, which gained more than 13%.

Tesla’s surge, which lifted the tech sector in general, came after the maker of electrical vehicles (EVs) vowed to speed up the launch of more affordable models.

The announcement saw investors shrugging off the company’s poor quarterly earnings report and news of big layoffs, executive exits and price cuts as investors bet the company’s full-year sales would rise.

Still, US markets were lower overall with the Dow Jones industrial average trading at 38,357.63 points at 6.53pm, a decline of 0.38%. The broader S&P 500 and the tech-heavy Nasdaq were also weaker, easing 0.32% and 0.31%.

On the US earnings front, attention now turns to the so-called Magnificent Seven tech companies, with Meta, the owner of Facebook, due to report later on Wednesday. TikTok and Microsoft results are due on Thursday.

Investors are also keeping an eye US GDP numbers that are scheduled to be released on Thursday and the Federal Reserve’s preferred measure of inflation, the personal consumption expenditure (PCE) index, that is due on Friday.

“Markets remain on edge ahead of the release of US GDP and PCE data later this week,” Citadel Global director Bianca Botes said.

Recent data has shown the world’s biggest economy remains resilient even with inflation remaining high, diminishing hopes the Fed will deliver three rate cuts this year as previously signalled.

The JSE all share closed 0.68% firmer at 74,513.93 and the top 40 added 0.77%.

In Europe, the FTSE 100 was little changed, while France’s CAC 40 eased 0.17% and Germany’s DAX dipped 0.27%.

At 6.40pm, the rand had weakened 0.52% to R19.20974/$, 0.41% to R20.5275/€ and 0.48% to R23.8911/£. The euro was 0.16% weaker at $1.0686.

Gold was little changed at $2,323.42/oz, while platinum lost 0.73% to $914.3/oz. Brent crude was 0.54% weaker at $88.02 a barrel.