JSE lifts a little after Jerome Powell strikes dovish note

The JSE pushed higher on Thursday morning, taking its lead from a firmer rand, which was benefiting banks, but putting pressure on rand hedges.

The local currency had pushed to a three-month high against the dollar, boosted by dovish testimony from US Federal Reserve chair Jerome Powell. Markets are pricing in increased chances of a 50 basis points cut at the Fed’s July meeting, offering the prospect of increased liquidity on global markets.

This helped propel US equity markets to record highs on Wednesday, and was supporting Asian equity markets on Thursday morning.

One of the principal drivers of soaring stock market valuation is the thought of easy monetary policy, which will bolster the US economy, Vanguard Markets managing partner Stephen Innes said. As the US economy was not currently struggling, this would “spur on an even more scintillating stock market rally for the remainder of 2019”.

At 9.40am the JSE had added 0.13% to 57,670.1 points and the top 40 was down 0.11%. Banks had added 0.54% and gold miners 0.62%. Platinums had fallen 0.38%.

Gold was up 0.12% to $1,420.50/oz and platinum 0.24% to $828.85. Brent crude was up 0.92% to $67.26 a barrel.

Naspers had fallen 0.22% to $3,463.54.

Diversified miner Glencore had lost 0.78% to R47.23.

Rand hedge AB InBev had fallen 1% to R1,267.16 and British American Tobacco 2.24% to R508.75.

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