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JSE began the day in slightly negative mode as markets await Ben Bernanke's speech
later on in the day.
A local trader said: "Everybody's eyes are looking to
the speech. There is a belief that this will give some direction going
forward."
He said contrary to expectations of a rebound, the rand was
still quite weak. However, this was elevating export performances and contributing
support to the local market as a wave of bad news came out of Europe.
By 09:07 local time, the JSE All-share [JSE:J200] index had
lost 0.16%. Gold stocks collected 1.17%, while platinum miners dropped 0.82%
and resources shed 0.42%. Banks gave up 0.32%, while industrials dipped 0.12%
and financials barely moved (-0.01%).
The rand weakened to R7.73 to the dollar, from R7.64 at the
JSE's close on Tuesday. Gold traded at $1 812.85 a troy ounce from $1 804.45 at
the JSE's previous close, while platinum was at $1 788.50/oz, from $1 783.50/oz
previously.
Dow Jones Newswires reported that Asian stocks were mixed in
edgy trade on Wednesday as dealers awaited the end of a US Federal Reserve
meeting later in the day, with most expecting new monetary easing measures to
jumpstart the economy. Investors also remain nervous about Europe's sovereign
debt crisis and concerns over a possible Greek default.
European bourses are likely to start lower with plenty of
tension in the markets ahead of the Fed's announcement and more news on the
Greece debt dilemma.
Greece is facing an estimated €4.6bn shortfall in its
efforts to cut its 2012 budget deficit, according to an International Monetary
Fund staff report presented to the fund's executive board last week.
Unless Athens can come to an arrangement with auditors to
release €8bn from its €110bn rescue package agreed last year, its reserves to
pay pensions and wages will run out next month.
Although overall sentiment on Tuesday was bullish, some
negative issues hit individual stocks. French banks in particular were hit by
reports that the Bank of China had stopped foreign exchange forwards and swaps
trading with several European banks as a consequence of the continuing debt
crisis in Europe.
US stock futures are higher on Wednesday, after a rally in
US stocks largely evaporated late in Tuesday's session following reports that
Greece's negotiations with international inspectors may drag out, and could
still fall apart.
The Federal Open Market Committee, which started its two-day
rate-setting meeting on Tuesday, is largely expected to announce a stimulus
measure, where the Fed would sell short-term Treasury holdings and buy
longer-term debt in an effort to push down long-term interest rates, making
borrowing cheaper for homeowners and companies. This is known as
"Operation Twist," which has its historical precedent in a similar
move enacted in 1961.
