JSE set to open to mixed Asian markets on Wednesday as risk appetite holds up

The JSE looks set to start to mixed Asian markets on Wednesday morning, with Wall Street higher overnight and analysts noting a level of resilience in risk appetite despite the recent hawkish pivot from the US Federal Reserve.

Analysts noted that the market had expected the Fed to signal a tougher stance on inflation, with global equity markets registering gains this week despite comments from policymakers that points to a faster pace for interest rate hikes.

US Fed pricing has lifted further, with 7.6 rate hikes now priced at the next six meetings, meaning the market is pricing in a chance of two 50 basis point moves, with the first in May and the second in June, National Australia Bank economics director Tapas Strickland said in a note.

Attention is also on the war in Ukraine, where there is hope of a ceasefire, with that country indicating it is willing to stop its pursuit of membership in Nato, a key demand from Russia.

In morning trade Japan’s Nikkei was up 2.85% and the Hang Seng 1.75%, while the Shanghai Composite gave back 0.14%.

Tencent, which influences the JSE via the Naspers stable, had gained 2.78%.

Gold was flat at $1,921.40/oz while platinum was down 0.23% to $1,021. Brent crude was up 2.43% to $117.22 a barrel.

The rand was 0.12% firmer at R14.794/$, having gained 0.81% on Tuesday.

SA’s Covid-19 restrictions have again been eased, with masks no longer being required outdoors, but the state of emergency has been retained.

Inflation numbers for February are due later, and are expected to show a slight acceleration from January’s 5.7%, though these figures will seem a bit out of date given the events in Ukraine, which have prompted a surge in the prices of commodities including wheat, oil and fertiliser.

The numbers come ahead of the Reserve Bank’s policy announcement on Thursday, with a 25 basis point increase expected. This would be the third consecutive meeting that resulted in a hike.

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