JSE flat after last week’s strong rally
The JSE was relatively flat at lunchtime on Monday, kicking off the new week on a tentative note.
The all share index was at 53,606 points, as the underlying constituent indices paused after a strong run last week.
Banks were little changed, after rising almost 5% last week in their biggest weekly gain since December, boosted by a sharp recovery in the rand.
"The short-term strength in the rand indicates that trading exposure in financial and banking counters should be retained for the moment," according to analysts at Momentum SP Reid Securities.
Retail stocks were mostly weaker, suggesting a level of profit-taking in shares such as Mr Price that rose 9% last week.
The all share gained just more than 3% over the course of last week, its best performance since April.
Both banks and retailers, which are sensitive to changes in interest rates, could get short-term direction from the Reserve Bank’s monetary policy committee, which is set to make its latest pronouncement on interest rates on Thursday.
Although the Bank is widely expected to keep the repurchase rate on hold, pressure is building on the central bank to lower rates to help relieve pressure on the local economy, which slipped into a technical recession in the first quarter of this year.
Resource stocks were marginally higher on the day, with analysts attributing the positive bias to stronger than expected economic growth in China for the second quarter. China is the biggest consumer of local commodities.
China’s economy grew at an annual rate of 6.9% in the second quarter of 2017, beating market forecasts of 6.8%.
In Europe, stock markets were mixed at midday, but US stock futures were positive, suggesting a higher opening on Wall Street later.
On the JSE, global resources miner and trader Glencore was up 1.17% to R54.60, Gold Fields 1.67% to R49.86; and Lonmin 9.2% to R12.23, following the release of an improved quarterly production report.
Diversified industrial group Barloworld was up 1.78% to R115, while Naspers shed 0.86% to R2,688.56, having gained just more than 9% last week.
MTN was up 1.26% to R123.23.
Construction and engineering group WBHO added 3.72% to R143.55.