Record JSE faces mostly higher Asian markets on Thursday

The JSE, which closed at a record high on Wednesday, could benefit from a generally positive Asian session on Thursday morning, boosted by some reassuring comments from US Federal Reserve officials.

Investor attention has been squarely on the conflict in Ukraine, which has contributed to an almost 50% rise in oil prices so far in 2022 and thrown into question expectations of less accommodative monetary policy this year. The conflict, however, has also lifted other commodities, notably gold and platinum group metals.

Russia’s invasion of Ukraine and resultant sanctions continue to roil commodity markets, which were already tight given the increase in demand from a reopening global economy and low inventories, said National Australia Bank currency strategist Rodrigo Catril in a note. The conflict has sparked record moves in coal, oil, gas, wheat and aluminium.

The JSE’s precious metals index has risen almost 30% in the year to date, helping the local bourse close above 77,000 points for the first time this week.

Sentiment on Thursday has improved in the wake of comments by US Federal Reserve chair Jerome Powell, who said on Wednesday he wasn’t expecting to raise interest rates as fast as many had predicted, and is only in favour of a 25-basis-point hike this month.

In morning trade, Japan’s Nikkei was up 0.81%, the Hang Seng 0.47%, and the Shanghai Composite 0.12%.

Tencent, which influences the JSE via the Naspers stable, had given back 1.42%.

Gold was flat at $1,926.67/oz, while platinum was little changed at $1,071.50. Brent crude had climbed 1.76% to $116.62 a barrel, having risen almost 6.5% on Wednesday, when oil cartel Opec confirmed it was sticking to a modest 400,000-barrel-per-day production increase, which the market had expected.

The rand was 0.11% weaker at R15.327/$.

Banking group FirstRand is due to report its results for the six months to end-December later, expecting a rise in headline earnings per share (Heps) of as much as 45%, and saying in a recent update a modest credit cycle has emerged in SA.

Financial services group Sasfin is expected to report that Heps more than doubled in its half-year to end-December, citing an easing in impairments relative to the prior comparative period.

Santam, Africa’s largest insurer, is due to report a surge in Heps for its year to end-December later, having been hit in the prior year by provisions for business interruption claims.

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