Markets mixed as investor sentiment remained cautious

Market commentary

The local bourse rose on Thursday, alongside its global counterparts in an attempt to stage a rebound. Markets have been tense amid concerns about potential retaliation from Israel following Iran's weekend attack. Furthermore, remarks from Federal Reserve Chair Jerome Powell earlier in the week suggesting that interest rates could remain elevated for longer added another layer of caution following the release of robust US economic data. The rand continued to weaken and was trading above the R19/$ mark for most of the day.

Stocks in the US shifted course during afternoon trading, relinquishing earlier gains and moving into negative territory. Both the S&P 500 and the Nasdaq were poised to conclude a five-day losing streak, with declines of 0.30% and 0.50%, respectively. Similarly, the Dow Jones, after initially gaining 290 points, retraced its steps and hovered close to the flatline at 21h55. The US initial jobless claims report for the week ending 13 April 2024 revealed fewer-than-expected applications for unemployment benefits, indicating continued strength in the job market despite the presence of high interest rates. According to Bloomberg, weekly unemployment claims serve as a gauge for layoffs in the US and offer insight into the trajectory of the job market.

Asian markets were mixed on Thursday with the Shanghai Composite edging up by 0.09%, marking the second consecutive session of gains for mainland stocks and following a general uptick in the Asia Pacific region. Investors remained cautious about China's economic outlook, considering data indicating stronger-than-expected growth in the first quarter alongside signs of weakening activity in March. In contrast, the Nikkei increased by 0.31% on Thursday, rebounding from earlier losses and tracking a broader recovery across the Asia Pacific region.

European stock markets rose on Thursday, with the FTSE 100 seeing a slight increase, building on a 0.70% rise in the preceding session propelled by favourable company updates. Meanwhile, Frankfurt's DAX 40 index rose by 0.40% to reach 17 837 points as investors digested comments from central bank officials on the trajectory of global monetary policies.

WTI crude futures fell below $82 per barrel, extending a four-day decline driven by diminishing concerns over geopolitical tensions and a notable increase in US oil inventories. According to EIA data, US crude inventories surged by 2.735 million barrels to their highest levels since June, surpassing market expectations for a build of 1.6 million barrels.

Meanwhile, gold prices rose to approximately $2 380 an ounce on Thursday, nearing record highs, buoyed by a weaker dollar. The greenback’s decline followed rare warnings from finance chiefs in the US, Japan, and Korea regarding depreciation in other currencies.