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Cape Town - Trading on the local bourse was mixed on Wednesday as local equities initially recorded gains in the morning session, only to give up some of the initial gains in the latter half of the day.
Mining shares recovered some losses sustained on Wednesday as commodity prices advanced, on the back of a weaker greenback. Global political uncertainty continues to be the main catalyst to market volatility with investors looking for clues to how the current political situation will unravel.
READ: Consumer inflation breather - for now
The financial sector was largely supported by a firmer rand, as better than expected CPI data released indicated the price of the CPI basket increased by 6.1% year-on-year which was better than the market expectation of 6.3% year-on-year. South Africa’s inflation remains on the upper end of the SA Reserve Bank’s inflation target band of 3 to 6%.
The rand strength claimed its casualties in afternoon trade, as some of the rand hedges such as British American Tobacco [JSE:BTI] and Richemont [JSE:CFR] eased to record losses of 1.43% and 0.91% respectively. The JSE top 40 ended softer to close the day at 45771, while the All Share Index closed the day down 127 points to trade at 52545. Most sectors chalked losses, with the Resource Index shedding 0.36%, while the Gold Index slid 2.34% and the Financial Index gained 0.14%.
International markets
London: Further afield, the announcement of the snap election in the UK by Prime Minister Teresa May on 18 April initially saw the Pound Sterling advancing as market optimism increased as the Conservative party attempts to stamp its authority in the UK. A win for May will give the market confidence as the British government continues to tackle the onerous task of exiting the European Common market. The FTSE 100 was trading flat on the day as the Pound eased after its rally on Tuesday to trade at 1.2813 against the Greenback at 17:00 SAST.
READ: London stocks plunge as May calls snap UK election
New York: The S&P 500 was trading firmer on the day with the near dated June futures contract trading at 2344 up 7 points on the day at 17:00 SAST. Consumer discretionary shares were 0.57% firmer on the day whilst financials were 0.38% firmer at the time of writing.
A barrel of crude oil was changing hands at $55.13/bbl down 10 cents from Tuesday's close. US crude oil inventories recorded a draw of 1.03 million barrels in line with market expectations, hence having very little effect on the crude price today. The main primary focus in the crude market will be the strength of the dollar and any developments in the Middle East crisis namely in Syria.
Gold was trading $9 softer on the day to trade at $1280/ounce, as investors withdrew from some save haven assets and looked to other assets classes as tensions in the Korean Peninsula seem to been on ice for now.
On Thursday the US markets will have their eyes on the weekly jobs numbers that will be released at 14:30 SAST, Inflation data out of Europe will also be key in shaping up the events of the day on the market on Thursday.
The only constant in the market at the moment is that volatility will remain for the near future and we all need to brace ourselves.
*This report is from the Trading Desk at EasyEquities, Fin24's latest content partner on equities and market moves.
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