JSE likely to take breather after strong run

The JSE could edge lower on Wednesday, taking a breather after the all share index gained a hefty 2.24% over the past five days, boosted mainly by a rebound in mining shares.

The precious metals and mining index, which is made up platinum shares and gold miners, has surged nearly 17% in the past five sessions, tracking a recovery in platinum group metal (PGM) prices in particular.

Iron prices have also staged a comeback, boosting big diversified miners such as Anglo American.

Elsewhere, Brent crude was steady at $83.32 a barrel, not far off a three-year peak of $84.20 touched on Tuesday.

The rising energy prices and their potential implications on global inflation and interest rates remain the key themes on the markets. With the acceleration in oil prices, speculation is rife that central banks could embark on a tightening cycle to fend off inflation. In this regard, the release of US inflation figures for September in the afternoon will be closely watched.

The US consumer inflation is likely to have risen at the annual pace of 5.3% in September, according to Bloomberg median estimate. The August inflation figures were the same at 5.3% year on year.

The rand was relatively flat in early trade at R14.95/$, while other commodity prices such gold and palladium were little changed on the day.

Equities in Asia were patchy, with Japan’s Nikkei 225 losing 0.19% while Hong Kong’s Hang Seng was shut because of a Typhoon Kompasu.