MARKET WRAP: JSE has best day in over a week while markets eye US Fed decision

The JSE had its biggest gain in more than a week on Wednesday as investors focus on the US Federal Reserve’s interest rate announcement, while concern over the coronavirus continues to hang over the market. 

Global equities were mixed on Wednesday as the rapid spread of the coronavirus continued to weigh on investor sentiment. The virus has now claimed 133 lives, prompting some airlines to suspend flights to China. 

The US Fed is expected to give its decision on interest rates later in the day, with markets expecting it to keep the rates unchanged.

“The Fed interest-rate decision will offer another distraction for investors, although it’s unlikely to generate too much hype given everything else that’s happening. Interest rates are likely on hold for the rest of the first half of 2020, barring a full-blown coronavirus pandemic that could spark the US Fed back to life,” said Oanda senior market analyst Craig Erlam.

“It will be interesting to hear what policymakers have to say, given what an eventful month it’s already been, what with tensions spiking with Iran, and the US signing a trade deal with China. I think the Fed will probably take a more considered, back-seat approach for now though, given its triple rate cut late last year.”

Shortly after the JSE closed, the Dow was up 0.14% to 28,764.15 points. In Europe, the FTSE 100 had fallen 0.17% while France’s CAC 40 added 0.38%, and Germany’s DAX 30 was flat.

Earlier, the Hong Kong Hang Seng dropped 2.82% while Japan’s Nikkei 225 gained 0.71% and the Shanghai Composite was closed.

The rand is still on track for its biggest monthly loss since August, as fear that the virus may have an effect on China’s economy temper risk appetite.

At 5.19pm, the rand had weakened 0.35% to R14.5996/$, 0.22% to R16.0724/€ and 0.14% to R18.9813/£. The euro was 0.12% lower at $1.1009.

The R2030 government bond was stronger with the yield falling 4.5 basis points to 9.03%. Bond yields move inversely to their prices.   

Gold was up 0.28% to $1,572.21/oz while platinum was down 0.43% to $983.2. Brent crude fell 0.41% to $59.59 a barrel.

The JSE all share gained 1.12% to 56,370.7 points, after dropping to a six-week low on Tuesday, and the top 40 1.09%. Industrials rose 1.48% and financials 1.01%.

Financial services company Quilter said on Wednesday that assets under management grew by 13% to £110.4bn (about R2-trillion) at the end of 2019. Its share price leapt 8.91% to R32.75.

Tiger Brands said earlier that its CEO Lawrence MacDougall will retire at the end of January. The company’s CFO Noel Doyle will take on the role of CEO from February. The company’s share price rose 0.95% to R212.

Tongaat Hulett said on Wednesday that it is in talks with the JSE to have the suspension of its shares lifted in the first week of February. The sugar producer said it expects to report a loss of between R303m and R327m in the six months to end-September, from a loss of R392m in the same period a year earlier.  

[email protected]