The JSE could pause for breath on Tuesday after a strong push in recent sessions that took the all-share to near record levels.
The local share market ended higher in May despite bouts of volatility at the start of the month. The all share gained 1.5% in May, marking its seventh straight month of gains, boosted mainly by the recovery in resource and industrial stocks.
Asian markets were muted in Tuesday’s session amid the lack of a fresh catalyst, given that the US markets were closed for a public holiday on Monday. Japan’s Nikkei 225 index and Australia’s ASX/200 were both flat, but Hong Kong’s Hang rose 0.61%.
The rand, meanwhile, held broadly steady at R13.70/$ after a 5% gain in May, which made it the top-performing currency among emerging-market currencies.
The stronger rand reduces the cost of imported goods, thus helping to keep in inflation in check.
Tilmann Kolb, analyst at UBS Global Wealth Management, said the rand could suffer collateral damage once the central banks in the developed markets in particular begin to scale back their loose monetary policy.
“As global rates have stabilised the rand has continued to rise, supported by commodity prices and the easing of fiscal worries in SA. We think the withdrawal of stimulus globally and SA’s fiscal situation will soon pose challenges again. Capital inflows and continued solid exports could further strengthen the rand, though,” Kob said.