(Alliance News) - Stocks in Johannesburg closed higher at the start of 2023, despite signs that markets will once again grapple with recessionary fears this year, like they did in 2022.

The JSE Top 40 index closed up 1,405.24 points, 2.1%, at 68,360.71. The mid-cap index closed up 1.0% at 77,869.88, and the All-Share index closed up 1.9% at 74,436.48.

Financial markets in South Africa, the US and UK were closed on Monday to observe the New Year's holiday.

The new trading year started on the front footing as investors remained hopeful that the US Federal Reserve might slow the pace of interest rate hikes, trumping worries about a global economic slowdown for now.

"The negatives hanging over the market are the possible impact of the rapid jump in Covid infections in China on the Chinese economy and ongoing global growth worries," dealers at TreasuryOne said.

On Tuesday, the latest purchasing managers' index revealed continuing weakness in China's manufacturing sector.

The Caixin manufacturing PMI reading slipped to 49.0 points in December from 49.4 in November. The reading is below the 50-point mark separating growth from contraction.

Official PMI survey figures released over the weekend showed a reading of 47 points, compared to 48 in November, according to the National Bureau of Statistics.

"In a clear reminder that the Covid nightmare is not yet over, the winter surge of infections held back factory output in China yet again in December, with a sharper contraction in activity recorded than in April, when cities were in the grip of mass lockdowns," Hargreaves Lansdown analyst Susannah Streeter commented.

The rand was stronger. The dollar was quoted at ZAR16.94, lower at the Johannesburg market close, compared to ZAR16.98 late Friday.

The pound was quoted at ZAR20.40, down from ZAR20.47 and the euro traded at ZAR17.94, down from ZAR18.13.

The benchmark R186 government bond yield was quoted at 8.90%, unchanged from late Friday.

On the JSE, the Resource 10 index closed up 1.5%, as gold and platinum prices increased.

Gold was quoted at USD1,840.04 an ounce at the close Tuesday, against USD1,815.56 at the close on Friday. Platinum was quoted at USD1,077.91 an ounce at the close Tuesday, against USD1,061.00 at the close on Friday.

Gold producers ended solidly higher on Tuesday. Gold Fields closed 5.0% higher and AngloGold Ashanti jumped 4.9%.

Platinum stocks were up. Anglo American Platinum gained 3.1%, and Impala Platinum 1.1% and Northam Platinum 2.3%.

Financial got off to a positive start to 2023. The Financial 15 index ended up 0.9%. Among constituents of this index, OUTsurance gained 2.2% and Growthpoint Properties advanced 2.3%.

In Europe, stock markets also were on the rise. London's FTSE 100 index was up 1.5%, the CAC 40 in Paris was up 0.9% and the DAX 40 in Frankfurt was up 1.2%. Paris and Frankfurt had been open on Monday, with the CAC and the DAX closing up 1.9% and 1.1%, respectively.

The manufacturing sector in the eurozone continued to shrink in December, though not as precariously as in November, final survey results from S&P Global showed on Monday.

The purchasing managers' index was confirmed at 47.8 points, the same as the flash reading. This was up from 47.1 in November and a three-month high.

The eurozone manufacturing output index similarly improved to 47.8 points from 46.0, setting a six-month high.

S&P Global said eased inflationary pressure and a more stable supply chain benefited eurozone factories, though they also felt weakness in client demand. Even so, employment growth continued in the sector, it said, while business confidence edged up to a seven-month high.

In Germany, consumer price inflation is expected to slow to 8.6% in Germany in December from a double-digit increase the month prior, data from Destatis confirmed on Tuesday.

The inflation rate in Germany, as measured by the year-on-year change in the consumer price index, is expected to be 8.6% in December, compared to 10.0% in November.

On a monthly basis, consumer prices are expected to be down 0.8% in December from November.

Destatis explained that due to the December immediate assistance, among other things, the inflation rate was significantly lower than in previous months.

In the US, the Dow Jones Industrial Average and S&P 500 were both flat, whilst the Nasdaq Composite 0.1% lower.

Brent oil was quoted at USD84.18 a barrel at the equities close Tuesday, higher from USD83.02 late Friday.

South African fuel prices will drop from Wednesday, giving motorists some relief at the start of 2023, the Mineral Resources & Energy Department said.

As of Wednesday, petrol will decline by 206.00 rand cents a litre, while the decrease in diesel prices will range from 268.90 cents a litre to 280.90 cents.

The department calculates and adjusts fuel prices on the first Wednesday of every month based on international and local factors, including the rand and crude oil prices.

The deceleration in fuel prices is mainly due to a weaker Brent crude oil price, which decreased to USD85.08 per barrel from USD88.77 in December, the department said in a statement on Saturday.

Wednesday's economic calendar has a eurozone services purchasing managers' index at 1100 SAT.

By Sophie Rose, Alliance News reporter

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