JSE Snapped Two-Day Winning Streak

Most markets posted losses on Wednesday, with the FTSE/JSE All Share Index (ALSI) ending its two-day winning streak amid rising inflation figures and Telkom (JO:TKGJ) woes. Local annual inflation eased for a second consecutive month to 7.50% y/y in September 2022. Although it matched market expectations, inflation is still above the South African Reserve Bank's target range of 3% to 6%. On a monthly basis, inflation inched up to 0.10%. Moreover, Business Day reported that the Telkom/MTN negotiations fell through, leading to Telkom falling 22.70% on the day. "Telkom shares dropped the most since being listed in 2003 after the fixed-line and mobile operator said MTN (JO:MTNJ) had "terminated discussions" regarding a possible takeover proposal. Telkom's statement indicated that MTN had sought guarantees that the state-affiliated operator would not entertain any offers from other parties. MTN expressed interest in acquiring Telkom in July, a deal that would have propelled it past Vodacom (JO:VODJ) to become the country's largest mobile operator."

Inflation data for the UK also came out on Wednesday, reaching a 40-year high of 10.10% in September 2022. The recent reversal of the UK government's unfunded tax cut plans and upbeat earnings results countered losses led by real estate and consumer discretionary counters. The pan-European STOXX 600 lost 0.53% on the day.

Wall Street traded in the red on Wednesday after higher US Treasury yields and share weakness from Abbott Laboratories (NYSE:ABT) slowed investor momentum, despite a surge from Netflix (NASDAQ:NFLX). At 23h00 local time, the Dow Jones, the Nasdaq and the S&P 500 were in the red. Moreover, Trading Economics stated, "Minneapolis Fed President Kashkari was the latest policymaker to warn that the Fed might need to lift its policy rate above 4.75% if underlying inflation continues to accelerate."

Asian markets were mixed on Wednesday as Japanese indices traded up on the back of an overnight Wall Street rally, while its Chinese counterparts reported losses "amid uncertainties during the Communist Party Congress, even as a raft of state-backed and large asset managers announced measures to stabilise the market," said Reuters.

Gold prices fell more than 1% to a three-week low on a stronger US dollar and US Treasury yields, which increased expectations of more aggressive rates hike. Brent crude rose above $90 per barrel in light of lower US inventories and tighter global supply.




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