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Johannesburg - The JSE was flat at the close on Wednesday‚ as market participants await the US Federal Reserve’s policy statement later tonight‚ with chairman Ben Bernanke expected to provide more clarity on quantitative easing.
The bourse earlier had a muted response to the weaker-than-expected local February CPI print and the announcement that the repo rate would stay unchanged at 5%‚ as expected.
SA’s consumer inflation rate rose to 5.9% year on year in February‚ after measuring 5.4% year on year in January.
At 5pm the All Share [JSE:J203] index closed flat (-0.07%) at 40 318.79 points‚ with general retailers the main risers lifting 1.39%‚ followed by industrials up 0.40%‚ while miners offset these advances. Platinums were the laggards in the mining space‚ dipping 1.38%‚ followed by general resource counters‚ down 1.01% and gold shares losing 0.97%.
“The CPI figure was higher than expected and put more pressure on the rand which supported certain sectors of the JSE. It was such a quiet day on the market‚ with traders waiting for the US Federal Reserve’s policy statement at 20:00. The statement will provide more clarity on the Federal Reserve’s position on quantitative easing‚ after earlier worries that monetary easing might be cut earlier than expected‚” Michael du Plooy‚ stockbroker at PSG Konsult in Pretoria said.
On the international front‚ uncertainty about Cyprus’s banking situation was lingering after its parliament on Tuesday voted down a plan to tax bank deposits‚ a condition for a bail-out.
Dow Jones Newswires reported that European markets gained ground‚ as investors awaited the next development in the Cyprus bail-out saga. Cyprus Finance Minister Michalis Sarris‚ in Russia to discuss financial support‚ said that talks were “very constructive” but that there was still no agreement on potential loans.
Meanwhile US stocks opened with broad gains‚ as investors looked to the Federal Reserve for reassurance amid a week dominated by concerns about Cyprus and its bailout plan. At 17:00 local time the Dow Jones Industrial Average was up 0.48% at 14 525.36 points.
Investors are looking to the US central bank for signs that Chairman Ben Bernanke is keeping abreast of the situation‚ and that the Fed will continue to support the economy with its programme of asset purchases.
