JSE firms as focus turns to Fed

The JSE tracked global peers firmer on Tuesday, perking up shortly before the afternoon session as investors looked past China tightening its Covid-19 policies and turned their focus to the US Federal Reserve (Fed) once more.

Concerns that China may tighten health curbs after reports of a string of Covid-related deaths put pressure on markets at the beginning of the week.

According to Bloomberg, Covid-19 control restrictions now weigh on a fifth of China’s economy as infections continue’ s to attempts mount, at defying more the targeted,government less disruptive Covid-19 measures.

Markets are now focusing on the pending publication of the minutes of the Fed’s most recent policy meeting for further clues on the central bank’s intended strategy.

On Monday, Cleveland Fed President Loretta Mester said the bank had made some progress with its fight against inflation, but it was too early to stop rate hikes. Still, Mester said she supported slowing their pace.

Investors expect the central bank’s policymakers to increase rates again in December, with 50 basis points the most likely outcome after four consecutive hikes of 75 bps.

“As was to be expected, it’s been a choppy start to the week so far in financial markets with cautious gains on Tuesday after marginal losses on Monday,” said Oanda senior market analyst Craig Erlam.

“On the one hand, we could be seeing investors warily waiting for the federal open market committee minutes and taking in all of the speeches from various Fed officials in the meantime,” said Erlam. “On the other hand, this week may just be a void in an otherwise

turbulent year, thanks to a lack

of major catalysts and the US Thanksgiving holiday at the end of the week.”

The JSE all share gained 0.42% to 72,242.33 points, with industrial metals rising 1.79% and regaining some of the previous session’s 2.32% loss sparked by fears of stricter lockdowns in China. The top 40 added 0.4%.

At 7.05pm, the Dow Jones industrial average was up 0.83% to 33,978.70 points, while in Europe, London’s FTSE 100 closed 1.03% firmer, and France’s CAC 40 and Germany’s DAX gained 0.35% and 0.29%, respectively.

The rand had strengthened 0.43% to R17.279/$ at 6.40pm, 0.18% to R17.7421/€, and 0.21% to R20.4963/£. The euro was 0.37% firmer at $1.027.

Gold firmed 0.22% to $1,740.65/oz, platinum added 1.69% to $995.02/oz and Brent crude was 1.25% stronger at $88.90 a barrel.