Markets Mixed as Investors Continue to Digest Rate Hikes

  • Market Overview

Global markets were mixed on Thursday as investors digested rate hikes made by central banks this week. The British index closed down after the Bank of England (BoE) hiked its fund rate by 25 basis points (bps) to 4.25%. Most EU markets also closed down after the Swiss National Bank raised its key policy rate by 50 basis points to 1.5%, pushing borrowing rates to the highest level since 2008.

However, Wall Street traded higher yesterday after experiencing losses the day before when the US Federal Reserve (Fed) hikes its benchmark rate by 25bps. At 23h55 the Dow was up by 0.23%, with the S&P 500 at 0.30% and the tech-heavy Nasdaq above 1%.

Most Asian markets traded higher after reports that the debt of China Evergrande would be restructured, causing property shares to climb slightly. However, Japan’s Nikkei 225 lost 0.17% after a weak showing on Wall Street the previous day.

The local bourse rose to 0.45% on Thursday boosted by solid gains in the industrial and financial sectors. This is despite the International Monetary Fund’s (IMF) warning that South Africa's growth will slow dramatically this year due to power outages and that the economy faces stagnation, forecasting 0.10% GDP growth in 2023. Likewise, a new study found that consumer confidence fell in the first quarter of 2023, owing to growing concerns about the country's economic future and family finances. The local currency was trading at R18.10 against the USD at 11h50.

The price of gold continued to rise on Thursday as investors sought safe-haven assets. Precious metal prices were bolstered further when Treasury Secretary Janet Yellen informed Congress that the US government was not considering "blanket protection" for bank depositors.

PSG Wealth Daily Investment Update, 24 March 2023

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