The JSE was firmer on Thursday morning, with its global peers mixed as investors worry that recovery from the Covid-19 pandemic will slow as elevated inflation will lead to tighter monetary policy sooner than expected.
Momentum from the US’s strong earnings season is beginning to fade as investors bet that key central banks are likely to increase interest rates.
On Wednesday, the Bank of Canada surprised markets by ending its quantitative easing programme and bringing forward its rate-hike expectations, citing a worsening inflation outlook.
Investors will also keep an eye on the European Central Bank’s (ECB’s) monetary policy statement. Investors will look for further clues about when the central bank will look to formally taper its asset purchases.
“With inflation nerves seemingly overcoming the US earnings trade, stock markets will be likely to adopt a defensive posture ahead of this afternoon ECB meeting,” Oanda senior market analyst Jeffrey Halley said.
“One thing we are probably not going to have to worry about in markets in the coming weeks is volatility. The amount of noise assailing my eardrums from multiple directions is becoming very loud and conflicted. Chief among, though, is that old chestnut, inflation. Is it transitory or sticky? Well, that depends on who you are talking to,” added Halley.
At 9.55am, the JSE all share had gained 0.39% to 67,740.42 points and the top 0.41%. Precious metals had added 1.42%, resources 0.87%, industrial metals 0.68% and industrials 0.45%. Banks had lost 0.65% and financials 0.47%.
At the same time, the FTSE 100 had lost 0.43% and Germany’s DAX 0.17%, while France’s CAC 40 gained 0.22% .
Earlier, the Shanghai Composite fell 1.23%, Hong Kong’s Hang Seng 0.32% and Japan’s Nikkei 0.96%.
At 9.50am, the rand was little changed at R15.0814/$, while it had weakened 0.16% to R17.5105/€ and 0.28% to R20.7617/£. The euro was unchanged at $1.1611.
Gold gained 0.31% to $1,802.8/oz and platinum 0.85% to $1,022.13. Brent crude was 0.34% weaker at $83.84 a barrel.Internet Explorer Channel Network