Picture: MICHAEL ETTERSHANK
Picture: MICHAEL ETTERSHANK

THE JSE closed firmer on Wednesday as risk-on sentiment ahead of the US rate decision boosted broad-based gains.

Investors awaited the US central bank’s decision on interest rates due later on Wednesday.

Analysts believe the most likely outcome, when the US Federal Reserve wraps up its policy meeting, is that it will hold interest rates steady. The Fed could be more hawkish in its statement, assuming a tone that would suggest the Fed could raise rates in the coming months.

At 5pm, the all share had risen 0.83% to 52,685.70 points and the blue-chip top 40 index had gained 0.93%. Resources rose 1.91% and the gold index firmed 1.89%. Platinums added 1.66%. Banks were up 1.01% and industrials gained 0.68%.

European stocks were generally up. At the JSE’s close the London FTSE 100 had firmed 0.68%, the Paris CAC 40 was up 0.03% and the German DAX 30 had added 0.66%. The Dow Jones industrial average opened 0.10% higher.

General retail shares were lower after growth in retail trade sales dropped in January as a result of a poor trading environment.

In real terms, retail trade sales increased 3.1% year on year in January 2016 compared with a 4.1% year-on-year increase in December 2015, while seasonally adjusted sales decreased 0.3% month on month.

An analyst at Capital Economics, John Ashbourne, said the drop in retail sales growth was the latest figure that suggested that the South African economy had lost momentum in January.

"We expect that growth (in gross domestic product) will be a below-consensus 0.5% for this year," he said.

Mr Ashbourne said while Capital Economics expected the Reserve Bank to hold rates at 6.75% on Thursday, a rate hike would add to the pressure on consumers.

Among individual shares on the local bourse, African Rainbow Minerals lost 8.99% to R81.82 and Kumba Iron Ore fell 7.10% to R78.50.

Bidvest rose 3.28% to R356.01.

Lonmin was down 3.32% to R32.87, while Impala Platinum was up 5.58% to R44.43.

Old Mutual added 1.60% to R43.69.

Among retailers The Foschini Group lost 2.26% to R130, while Massmart slipped 2.59% to R117.50.

Basil Read was 3.06% higher at R3.70.

After trading weaker in the morning Illovo Sugar ended the day 0.73% sweeter at R20.65.

Nampak climbed 5.10% to R20.39.