JSE faces firmer Asian markets on Thursday as sentiment perks up

The JSE looks set to open to generally positive Asian markets on Thursday morning, with the rand trading at a three-week high against the dollar, as markets welcomed some certainty over the future of US monetary policy.

Sentiment has been strained this week as surging energy costs and supply-chain disruptions stoke inflation fears and erode the global growth outlook.

Markets were looking to the release of minutes from the US Federal Reserve’s September meeting on Wednesday, as well as inflation data for the same month. The minutes showed a tapering announcement in November is highly likely, while US consumer inflation came in as expected, rising 5.4% year on year, from 5.3% in August.

Both the minutes and inflation were broadly as expected, said National Australia Bank analyst Tapas Strickland in a note. The dollar, however, took a breather, after an index measuring it against a basket of other currencies hit a 12-month high on Wednesday.

Locally, there was some good news as Eskom suspended load-shedding, though it warned a number of its generating units remained fragile and further breakdowns were a threat.

In morning trade, the rand had extended gains and was trading 0.13% higher at R14.78/$, having gained 1.13% on Wednesday.

Commodity exports are a major foreign currency earner for SA, and higher prices provide support to the rand.

The Shanghai Composite was up 0.15% and Japan’s Nikkei 1.4%.

Gold was 0.24% weaker at $1,788.54/oz, having risen 1.78% on Wednesday, its best day since early March.

Platinum was flat at $1,018.07/oz, having risen 1.48% on Wednesday. Brent crude was up 0.46% at $83.72 a barrel.

Brian Joffe’s investment group Long4Life is due to report its results for the six months to end-August later, saying in a trading update in early September its businesses had performed pleasingly, with the group’s beverage division bringing in trading profit above pre-pandemic levels. Headline earnings per share is expected to rise as much as 52% relative to 2019, though the number of the group’s shares has also fallen more than a quarter since then amid a buyback programme.

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