The local bourse ended slightly lower on Monday, down 0.19%, amid mixed global markets as investors awaited the US Federal Reserve’s preferred inflation gauge. Despite the slight dip, the FTSE/JSE All Share Index (ALSI) remained close to its record high following last week’s broad rally. Investors were buoyed by Fed Chair Jerome Powell’s hint of potential interest rate cuts, which had been eagerly anticipated despite earlier concerns about high borrowing costs impacting the US economy. However, Powell did not provide details on the timing or scale of these cuts. Meanwhile, the rand weakened to R17.71/$ by 18h00.
European stocks ended flat, holding on to last week's gains as markets weighed the potential impact of expected Fed rate cuts on European borrowing costs. The Eurozone’s STOXX 50 dipped slightly to 4 898 points, while the STOXX 600 remained steady at 518. Military tensions between Israel and Hezbollah over the weekend further dampened sentiment, raising fears of reduced energy supply.
Japan’s Nikkei dropped 0.66% to 38 110, and the Topix Index fell 0.87% to 2 661, pressured by a stronger yen after Bank of Japan Governor Kazuo Ueda signalled possible rate hikes. Meanwhile, Hong Kong's Hang Seng surged 1.10% to 17 799, buoyed by China’s capital market regulator encouraging greater investment to support the stock market.
In the US, stocks had a volatile session, with the Dow Jones reaching a record high, while the S&P 500 and Nasdaq 100 fell by 0.30% and 1%, respectively, driven by losses in tech stocks. The market showed signs of sector rotation, with energy stocks gaining over 1% as investors responded to Powell's signal of imminent rate cuts.
Brent crude oil futures rose above $81 per barrel for the third consecutive session, spurred by Middle East supply concerns, while gold surged past $2 520 per ounce, nearing record levels following Powell's confirmation of potential rate cuts in September.
