Rand firms ahead of US Fed meeting

JSE up over 2% after rout.
Image: Shutterstock

South Africa’s rand strengthened in early trade on Wednesday, as investors awaited the outcome from the U.S. Federal Reserve’s policy meeting and potential peace talks between Russia and Ukraine.

At 09:53, the rand traded at 15.09 against the dollar, 0.19% stronger than its previous close.

The JSE All Share was 2.89% higher at 72 670 points, while the Top 40 was 3.16% higher at 66 323 points.

JSE Alsi and Top 40

Naspers saw its shares soar 18.31% to R1 767.21 by mid-morning on Wednesday, after plummeting to a R1,493.70 close on Tuesday. Prosus was up 18.43% to R850.55 (after Tuesday’s R718.20 close).

Naspers is the biggest shareholder in Tencent, which gained at least 24% on Wednesday. This, according to Bloomberg, after China’s state council “vowed to keep its stock market stable amid a historic rout that erased $1.5 trillion in value over the past two sessions.”

Read:
China stocks jump most since 2008, as state council vows support
JSE plunges below 70 000 points on Naspers/Prosus fallout

The Hang Seng China Enterprises Index, which tracks mainland companies listed in Hong Kong, jumped as much as 13% on Wednesday, its biggest gain since the global financial crisis. A gauge of Chinese tech firms soared by record with Alibaba Group and Tencent gaining at least 24%.

But investors were cautious before the U.S. Federal Reserve’s rate decision, with the Ukraine war and China’s surging Covid-19 cases as the backdrop.

“The foreign-exchange markets have struggled to establish any meaningful or discernible trend over the course of the most recent sessions,” Nedbank analysts wrote in a note.

“This scenario is undoubtedly attributable to the ongoing global scenarios and the FOMC (Federal Open Market Committee) meeting today.”

The Fed is set to raise rates for the first time since the pandemic, with traders looking for indications about the pace of future rate hikes.

On Russia and Ukraine peace talks, Ukrainian President Volodymyr Zelenskiy said on Wednesday that the talks were sounding more realistic but more time was needed.

In fixed income, the yield on the benchmark 2030 government bond was flat at 9.795%.

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