MARKET WRAP: JSE ends firmer, rand back above R19/$

The JSE ended marginally firmer on Friday, in line with global markets, but is still down 2.13% for the week and 5.5% so far this year. The rand was back above the R19/$ level amid a firmer dollar.

The JSE all share index closed 0.44% higher at 72,660.91 points, while the top 40 added 0.5%. Banks firmed 0.64%, financials were up 0.61%, resources garnered 0.44% and the precious metals & mining index added 0.4%.

At 5.55pm, the Dow Jones industrial average was up 0.15%, while London’s FTSE 100 added 0.14%. France’s CAC 40 was off 0.36% and Germany’s DAX was flat.

This week was dominated by a search for clues about the timing of cuts in US interest rates and widening Middle East tension. 

Investors’ attention has been focused on the World Economic Forum in Davos where official participation and sideline comments by monetary policy officials were scrutinised for signals about the timing of the first interest rate cuts expected by the US and European central banks later this year, the BER said in its weekly update.

Markets are pricing in a 57% chance of a US rate cut in March, down from 75% a week ago, Reuters reported.

“On the financial markets, amid a tense global geopolitical environment, sentiment towards emerging markets soured, with the rand facing the full brunt of the risk aversion,” the BER said.

The local unit weakened past R19/$ for the first time since late October on Wednesday, before firming on Thursday as the dollar eased, but was back above the key level on Friday.

At 5.45pm the rand had weakened 0.76% to R19.0788/$, 0.7% to R20.7343/€ and 0.41% to R24.1542/£.

Gold is trading a little higher at the end of the week after rebounding off $2,000 a day earlier.

Gold has been driven off its recent highs by “slightly softer expectations for rate cuts this year and a lack of data that could turn things back in its favour”, said Craig Erlam, senior market analyst at Oanda.

“The figures we’ve seen since the turn of the year have been fine but more than that is needed to maintain the enthusiasm markets ended 2023 with.” 

Gold was 0.13% higher at $2,025.29/oz and platinum was little changed at $901.50/oz. Brent crude gained 0.6% to $79.37 a barrel. 

“While the price of crude remains sensitive to events in the Middle East, as we’ve seen over the last couple of weeks, the oil market remains well-balanced which is why we’re not seeing prices higher. Supply disruptions remain an upside risk but there are downside risks too including the global economy and Opec+ unity,” said Erlam

[email protected]