The FTSE/JSE All Share Index fell by approximately 0.90% to close at 72 946 on Tuesday as investor sentiment remained cautious ahead of the release of domestic inflation data and Finance Minister Enoch Godongwana's budget speech scheduled for Wednesday. Godongwana's budget speech will be closely monitored by investors who are eager to gain insight into his strategy for steering the country away from fiscal challenges while promoting economic growth, especially in the lead-up to crucial elections. On the economic front, South Africa's unemployment rate climbed to 32.10% in the fourth quarter of 2023, rising from a one-year low of 31.90% in the preceding period. Meanwhile, President Cyril Ramaphosa announced that the 2024 elections will be held on 29 May 2024.
The Shanghai Composite increased by 0.43% to close at 2 923, while the Shenzhen Component edged up by 0.040% to 8 906 points. These gains extended from the previous session as investors reacted to the latest decision from the central bank. The People’s Bank of China implemented a more significant-than-expected cut of 25 basis points to its five-year loan prime rate, reducing it to 3.95%. This move is the most aggressive since the rate's introduction in 2019 and comes as China continues to grapple with a sluggish economic recovery. Meanwhile, the PBOC opted to keep its one-year loan prime rate unchanged at 3.45%. The Nikkei fell by 0.28% with Japanese shares easing further from 34-year highs and tracking regional peers lower as risk-off sentiment dominated financial markets.
Frankfurt's DAX 40 index slipped by 0.10% as investors processed a wave of corporate earnings. They are also anticipating several key events scheduled for later in the week, including Nvidia's (NASDAQ:NVDA) financial results and the release of the Federal Open Market Committee (FOMC) minutes on Wednesday. Additionally, investors are looking ahead to the Eurozone's flash PMIs and European Central Bank (ECB) accounts on Thursday, as well as the German Ifo business survey due Friday.
Wall Street traded cautiously as markets reopened after being closed on Monday due to a public holiday. These losses were primarily driven by a downturn in mega-cap technology stocks, with investors expressing concerns about elevated valuations in this sector. In contrast, the Dow Jones traded around the flatline, showing more stability compared to the other indices.
In commodities, Brent crude was trading on the lower end on Tuesday and it was down $82.25 a barrel at 18h00 while gold rallied to trade over the $2 000/oz mark around the same time.
