JSE could extend gains on Wednesday ahead of Fed decision
The JSE could take its lead from firmer Asian markets on Wednesday morning, with equities finding support from policy announcements by global central banks this week.
The Bank of Japan (BoJ) committed to unlimited bond purchases on Monday, while all eyes are on the US Federal Reserve policy announcement later, when details on its policy barrage are expected.
The Fed is expected to send a message, in unambiguous terms, that extraordinary policy settings will remain in place for as long as it takes, AxiCorp chief global markets strategist Stephen Innes said in a note.
However, the concern about second wave of coronavirus infections, dismal economic data, and disappointing corporate earnings reports is weighing on sentiment, said Innes.
The Fed is likely to keep interest rates unchanged, but the market will be watching for the pace of asset purchases, as well as comments regarding how long interest rates will be kept near zero, said BK Asset Management MD for foreign exchange strategy Kathy Lien in a note. There is no doubt the Fed will say that it does not plan to raise interest rates any time soon, said Lien.
In morning trade the Shanghai Composite was up 0.47% while the Hang Seng had risen 0.27%.
Gold was up 0.21% to $1,710.34/oz while platinum had risen 0.24% to $772.40. Brent crude was up 0.53% to $21.04 a barrel.
The rand was up 0.21% to R18.55/$, putting it on track for its fourth consecutive session of gains.
There is little on the local corporate or economic calendar on Wednesday, with focus instead on global events. The Fed’s policy announcement is expected at 8pm SA time.
Source: businesslive.co.za
