Johannesburg – The JSE was treading water on Wednesday
morning‚ trading just shy of its record high reached on Tuesday‚ with markets
participants awaiting local inflation figures‚ out at 10am‚ and all markets
awaiting the US Federal Reserve’s announcement on Wednesday evening‚ with
further stimulus measures expected.
At 9:31am‚ the All Share [JSE:J203] index was flat (-0.06%)
at 38‚514.61 points‚ with the Top 40 - (Tradeable) [JSE:J200] index dipping
0.09% to 34‚210.58 points.
Resources showed a bit of upside‚ while financials and banks
were trading softer.
In news on the US fiscal cliff‚ the Senate Democrat leader
said on Tuesday that a deal before Christmas was unlikely.
Rand Merchant Bank said in a morning note: “Expectations of
what the Fed will announce are fairly uniform: a switch of the expiring $45bn
Operation Twist - under which they buy long-dated treasuries and sell
short-dated paper - into new outright treasury purchases. Anything less would
be dollar positive and vice versa.
“The market will also be looking at the post-meeting
statement to see the Fed’s progress towards adopting numerical thresholds on
inflation and the unemployment rate‚” RMB said.
“The big corporate news is that Rio Tinto and Anglo are to
sell their stake in Palabora Mining to a consortium made up of Chinese
companies and the Industrial Development Corporation. This could generate net
inflows or outflows depending on how minorities react‚ but at this stage it
looks like the net flows will be small. Flows anyway would wait for regulatory
approval‚ which could apparently take four to six months‚” the bank said.
“We expect a slight moderation in the local inflation today‚
from 5.6% to 5.5%‚ while consensus expects a stabilisation at 5.6%. The
consensus forecast range of 5.4%-5.9% suggests there is upside risk and we
would view a print outside of the 5.5%–5.6% range as a surprise.”
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