5 things you need to know before trading opens today
·29 Mar 2016
Here’s what is happening in the markets:
- South African consumers are a week away from a heavy blow to their finances, as April looms with price hikes for essential and luxury services. As of April, Electricity will be hiked by 9.4%, petrol and the new fuel levy will add around 80 cents per litre and services such as a DStv subscription will do up by 8%. Inflation in February was over 7%, and is expected to climb even more – hitting food prices, which have already rocketed due to an ongoing drought.
- Following strong gains made on the JSE this month, analysts expect things to settle down for the exchange this week, with no big sell-off predicted. The JSE, along with most stock exchanges, has been taking it cue from US stocks – but uncertainty remains around the mining sector, which has seen a decline in recent weeks.
- South African markets were closed for four days straight due to the long Easter weekend. Prior to the break, the market was volatile against the backdrop of political uncertainty, while a ratings downgrade is still on the table from ratings agency Moody’s, which was in the country to assess the situation. On Tuesday, the rand was trading at R15.47 to the dollar, R22.01 to the pound and R17.32 to the euro.
- In global news, Asian shares struggled to find their footing on Tuesday and the dollar clawed back ground lost after downbeat US economic data contributed to an uninspiring session on Wall Street. Most emerging Asian currencies gained on Tuesday as the dollar eased after disappointing US economic data, but the possibility that a speech by Federal Reserve Chair Janet Yellen could signal a rate hike soon made market participants cautious
- Oil prices fell in early Asian trade on Tuesday as concerns mount that a rally since January is fizzling out, while analysts forecast another rise to record levels for US crude stockpiles. Locally, the Central Energy Fund is reporting a 46 cent and 64 cent under recovery in petrol and diesel prices, pointing to a 76 cent and 94 cent hike in the fuel price in April, including the fuel levy hike.
In other news: South African road agency Sanral says that it has no choice but to go after people who refuse to pay for e-tolls, to show international ratings agencies that it can take care of its money issues, as the threat of downgrade looms.
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