"The South African stock market opened to the downside as investors reacted to the Federal Reserve's interest rate decision. While the 25-basis-point cut came out as expected and the Fed's projections pointed to more cuts this year, the cautious tone of the Fed Chair had an impact on sentiment and could weigh on risk appetite. A decline in gold prices also weighed on the stock market and could continue to put pressure on the mining sector if corrections persist."
"As a result, stocks could see some volatility. Investors could also remain cautious ahead of the SARB's own interest rate decision. The central bank is expected to leave interest rates on hold in a bid to push inflation toward the 3% target. At the same time, yesterday's CPI slowed to 3.3% YoY (-0.1% m/m) with core at 3.1%, pointing to cleaner disinflation, which could support future monetary policy easing. In the meantime, retail sales rose 5.6% YoY, signalling firmer consumer momentum."
South African stock markets opened lower as investors reacted to the Federal Reserve's interest rate decision. The Fed delivered a 25-basis-point cut as expected, and projections indicated more cuts this year, but the Fed Chair's cautious tone dented sentiment and could reduce risk appetite. Gold prices declined, weighing on equity performance and potentially pressuring the mining sector if corrections persist. Stocks face potential volatility ahead of the South African Reserve Bank's rate decision, which is expected to remain on hold to steer inflation toward a 3% target. CPI slowed to 3.3% year-on-year with core at 3.1%, while retail sales rose 5.6% year-on-year.
#south-african-equities #federal-reserve-rate-cut #gold-and-mining-sector #inflation-and-retail-data
Read at London Business News | Londonlovesbusiness.com
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