JSE FTSE All Share Index Rises Despite Stronger US Dollar and Weaker Gold Prices

Quick overview

Despite the weaker Gold price and stronger US dollar, the JSE FTSE All Share Index (JALSH) tracks the overall performance of the largest companies listed on the Johannesburg Stock Exchange, maintained its upward performane and is still showing gains in the early European trading session. At the time we are writing this article, the index is currently at 111,507.32 ZAR, showing 0.96% gains in the last 24 hours.

Although the gains in the JSE FTSE All Share Index could be short lived as the US dollar receives support mainly from renewed market expectations of Federal Reserve interest rate hikes later this year.

Mixed Gold Mining Performance Supports the JSE Index

Another thing that is impacting the JSE index is the mixed performance of the South African gold mining stocks. For example, Harmony Gold company is performing well today; however, its shares are trading with a gain of more than 7 percent at around $16.20. Meanwhile, Gold Fields shares are down 1.8 percent and are trading at around $35.46, while AngloGold Ashanti is down 0.3 percent and is trading at around $84.65. These mixed results affect the JSE All Share Index because these three major companies are important components of the JSE All Share Index. Therefore, Harmony Golds strong performance is supporting the JSE index. Whereas Gold Fields and AngloGold Ashanti losses are not so big, so the overall negative impact on the JSE index remains limited.

Strong Dollar and Fed Rate Hike Hopes Weigh on JSE Index

Despite the previously released disappointing US job data, the broad based US dollar started this week on a bullish track and gained further traction in the new session. During the early European trading session, the US Dollar Index (DXY) is trading at 101.02, showing a 0.16 percent gain. However, the greenback receives support mainly from renewed market expectations of Federal Reserve interest rate hikes later this year.

As per the latest survey, the CME FedWatch tool shows financial markets are pricing in a 77.3 percent chance of Federal Reserve interest rate hikes by the end of the year. This is because people think the Fed will focus more on controlling inflation than on the poor job numbers.

Therefore, the strong US dollar is putting negative pressure on the rand and hurting mining stocks, which was seen as a key factor that could cap further gains in the JSE index.

Looking forward, traders are keeping thier eyes on the US Institute for Supply Management (ISM) Services Purchasing Managers Index (PMI), which is scheduled to be released later in the day. Afterward, the release of the Fed’s June policy Meeting Minutes will be in the traders spotlight in order to get fresh clues about interest rates.

ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

JSE All Share Index Rises as Gold Prices Climb Despite Stronger Rand

3 days ago

Save

JSE FTSE All Share Dips Below 1% as US-Iran Tensions & Weak Rand Hit Markets

5 days ago

Save

JSE FTSE All Share Index Climbs on Weak Dollar, Mining Shares and New Listings

1 week ago

Save