After reaching record highs on Monday, the local stock market rally petered out on Tuesday as the JSE All Share Index (-0.44%) and Top 40 Index closed lower after US Federal Reserve officials indicated that the Fed would still have to raise interest rates.
The all share soared to a record high on Monday after investors bet that the Fed may slow down its monetary policy tightening and the reopening of China’s economy after border posts were opened three years after coronavirus first hit.
But two Fed officials indicated on Monday that the American central bank would still have to raise interest rates with consumer price pressure still well above the bank’s 2% mark.
The market will have more of a sense of direction this week when Fed chair Jerome Powell speaks on Thursday with US consumer price index numbers due out on the same day.
US inflation is expected to drop, and should it come down significantly it could have implications for the Fed’s aggressive monetary tightening policy.
At 05.03 pm, Germany’s DAX was down 0.24%, France’s CAC 40 lost 0.59% while London’s FTSE 100 was trading 0.41% lower.
At the same time, the Nasdaq (0.25%) and S&P 500 (0.14%) were firmer.
In Asia, the Hong Kong Hang Seng (-0.27%) and Shanghai Composite (-0.21%) closed lower while the Nikkei added 0.78%
In the currency markets, most currencies were trading flat this morning following stronger closing levels against the dollar on Monday evening. At 05.00 pm, the local unit was trading at R17.05/$.
