JSE slips as markets assess less dovish US Fed

The JSE was lower on Thursday morning after the US Federal Reserve dampened expectations that it may further cut its interest rate in 2019.

The Fed cut its interest rate by 25 basis points on Wednesday, its second cut in 2019, with Fed chair Jerome Powell citing the trade war between the US and China as well as subdued global economic growth as ongoing risks. Division among policymakers has lessened hopes that the Fed will cut at its next meeting in December.

“Everything feels a little flat in the markets after the Fed left investors deflated and frustrated, despite delivering the 25 basis-point rate cut they demanded,” senior market analyst at Oanda Craig Erlam said.

“There is clearly a wide range of views within the central bank — hence the three dissenters, one wanting more and two less — but one thing that did come across is that they are refusing to factor in a trade war into their forecasts in the same way that the market is,” Erlam said.

Earlier, the Shanghai Composite added 0.46% and Japan's Nikkei 225 0.38%, while Hong Kong's Hang Seng lost 1.07%. 

At 11.10am, the JSE all share was down 0.62% to 55,869.40 points and the top 40 was 0.62% lower. Gold miners lost 2.73% and the platinum mining index 2.71%. 

Mr Price said on Thursday it faced potential financial exposure of between R10m and R20m in an investigation into a relationship between two senior managers and one of its suppliers. Its share price was flat at R157.90.

Texton Property fund climbed 4.73% to R3.10 after the landlord said on Thursday that its diluted and headline earnings per share grew 107.5% to 55.61c in the year to end-June.

The SA Reserve Bank will announce its decision on the repo rate later on Thursday, after cutting the rate by 25 basis points at its most recent meeting in July.

mjoo@businesslive.co.za