JSE could open higher on world markets

The JSE could open higher on Thursday morning, taking its cue from Asia, though the upward momentum in stocks appears to be tapering off, with some near or at record highs.

The JSE all share index has had its best first quarter since June 2020 with a gain of about 12%, while the Dow Jones Industrial Average and S&P 500 in the US closed at record levels yet again on Wednesday.

The outsize gains in stocks makes them susceptible to pullbacks, at least in the short term.

The release of the minutes of the US Federal Reserve’s last policy meeting elicited little market reaction, with the rand holding steady against the dollar at R14.55/$.

The minutes showed that the world’s most influential central bank was in no hurry to raise interest rates from the record low levels. The Fed also showed no sign of tapering its bond buying programme.

Higher rates in the US have a potential to hurt the rand via bond outflows.

Asian markets were broadly higher, though Japan’s Nikkei 225 bucked the trend with a drop of 0.29%.

“The importance of a rapid vaccine rollout can’t be overstated. Quite simply, the quicker the population is vaccinated the quicker the reopening process can happen and the less likely that deep economic scars will be left,” said Sophie Griffiths, market analyst at Oanda.