JSE rises modestly in line with positive global markets

The JSE rose modestly on Friday, taking its cue from world markets, which were relatively calm and composed after bouts of volatility earlier in the week.

Wall Street provided stability and set the global tone, after Big Tech stocks rallied on Thursday.

By midday the JSE all-share index had risen 0.53% to 72,725.12 points as investors snapped up a range of beaten-down stocks, including resources and banks.

However, the all-share is still down 1.9% so far for the week, which has been dominated by market jitters on the timelines of potential interest rates cuts in the US and other developed markets.

The markets and the US Federal Reserve, in particular, are in a tug-of-war over the timeline and quantum of the potential cuts in interest rates.

While the Fed has signalled a total of 75 basis points cuts in the federal funds rate in 2024, markets have priced in more, raising the risks of further volatility if the data on which the Fed bases its rates decisions point in the opposite direction to what the markets are anticipating.

The Fed’s monetary policy has implications on the world economy.

Earlier this week, Fed governor Christopher Waller said the Fed shouldn’t hasten to cut interest rates until it was convinced that inflation would return to the central bank’s 2% target on a sustainable basis.

Other central bankers attending the World Economic Forum in Davos have sought to manage market expectations in their collective messaging about the future on interest rates.

The SA Reserve Bank is expected to keep interest rates on hold when its monetary policy committee ends its scheduled meeting next Thursday.

In the currency markets, the rand was slightly weaker at R18.95/$, but remained below the psychological R19/$ level which it breached earlier in the week.