The South African rand remained stable on Tuesday, while the JSE pared its earlier gains as investors digested disappointing local GDP figures. The FTSE/JSE All Share Index edged up by 0.10% to close at 85 818.8 points, though major indices showed mixed performances. According to recent data from Statistics South Africa (Stats SA), the economy contracted by 0.30% in the third quarter of 2024, falling short of market expectations, which had predicted a modest 0.50% growth. The biggest contributor to this decline was a steep 28% drop in agricultural output. Without this downturn in the agriculture sector, the economy would have grown by approximately 0.40%.
US stocks remained relatively flat to lower on Tuesday, after the S&P 500 and Nasdaq reached record highs the previous day. The market paused following the release of October’s job openings data, which revealed 7.744 million job vacancies, exceeding expectations of 7.48 million. Investors are now focusing on the upcoming jobs report on Friday, which is expected to show strong hiring numbers. Additionally, all eyes are on a speech by Federal Reserve (Fed) Chair Jerome Powell on Wednesday. Markets are currently pricing in a 70% probability of a rate cut by the Fed in December.
In contrast, the UK’s FTSE 100 rose by 0.40% to approximately 8 350 on Tuesday, extending gains from the previous session. Traders weighed domestic economic data while keeping a close watch on the political developments in France. On the domestic front, the latest BRC-KPMG retail sales monitor revealed a 3.30% year-on-year drop in sales for the four weeks from 27 October to 23 November, excluding Black Friday, which occurred on 29 November. This decline was further compounded by uncertainties surrounding the French political situation, with Prime Minister Michel Barnier invoking special constitutional powers to pass a controversial budget, setting the stage for a potential no-confidence vote from opposition parties later this week.
Across Europe, stocks followed a positive trend, with the Stoxx 50 and Stoxx 600 climbing 0.50% and 0.60%, respectively, to reach a one-month high. Retail stocks rose by 1.60%, and construction and materials sectors saw over 1% gains. However, insurance stocks dipped by 0.40%. In France, political tensions escalated as opposition parties pushed for a no-confidence vote after the government's use of special powers to push through the budget.
In Asia, Japan’s Nikkei 225 surged by 1.91% to close at 39 249, with the broader Topix Index rising 1.43% to 2 754. The rally was driven by strong performances in the technology sector, following positive momentum from Wall Street, where major US tech stocks led the charge.
Meanwhile, in China, the Shanghai Composite rose by 0.44% to close at 3 379, while the Shenzhen Component slipped 0.40% to 10 714. Market sentiment was mixed as the latest US crackdown on China’s semiconductor industry weighed heavily on investor confidence. The US government recently imposed export restrictions on 140 Chinese companies, limiting Beijing’s access to American technology, particularly in the AI sector.
In commodities, WTI crude oil futures rose to around $68.50 per barrel as traders looked ahead to Thursday’s OPEC+ meeting for further insights on global supply. Gold prices stabilised above $2 640 per ounce, with investors bracing for crucial US jobs data and more speeches from Fed officials, which could provide clarity on the central bank’s future monetary policy direction.
