Futures jump on Dow opening and JSE record high, as Mugabe resigns
South African futures were higher on Tuesday as the JSE all share closed at a record high for the second consecutive session.
There may be some indications of a positive resolution to Zimbabwe’s political impasse, amid late reports on Tuesday that Robert Mugabe had resigned.
The all share ended the day 1.18% higher at 61,211.50 points, and the blue-chip top 40 added 1.36%. Resources climbed 2.2%, platinums 1.46%, the gold index 1%, and industrials and banks both 1.06%. General retailers lost 1.62%, and food and drug retailers 0.41%. Property ended little changed.
The Dow was up 0.62% higher, at record levels, soon after the JSE’s close as strong earnings numbers supported tech stocks.
European markets were also higher, as the market appeared unaffected by concern over German Chancellor Angela Merkel’s failure to form a new coalition government. Merkel said earlier she would rather hold another election than lead a new government that lacked a majority in parliament, Dow Jones Newswires reported.
However, while a collapse of talks over the weekend left Merkel without a majority, investors were, once again, focusing on the country’s strong contribution to European economic growth. "Yes, politics was in play in Europe, but it still looked like markets were focusing on fundamentals of positive earnings results," said Nandini Ramakrishnan at JP Morgan Asset Management.
The FTSE 100 firmed early on reports that the UK was preparing to double its offer for a Brexit "divorce" settlement, only to pare gains after UK public-sector spending came in higher than expected.
Although the Brexit offer would still be below what the EU had demanded, it raised some optimism among investors that Brexit talks may be able to progress towards discussing a trade deal, the newswire reported.
The rand broke through R14 to the dollar to R13.9963 on the news of Mugabe’s resignation from R14.0438. The euro was at $1.1734 from $1.1732.
The top-40 Alsi futures index gained 1.63% to a record 55,528 points. The number of contracts traded was 24,527 from Monday’s 20,845.