Futures rise in line with JSE while Dow surges above 26,000 points
South African futures tracked a positive JSE and resurgent Dow on Tuesday, with local and international factors helping to support risk-on trade.
Rand strength gave the market the bulk of its direction, with resources under pressure from softer prices for most commodities.
Reports on Monday and Tuesday that authorities were about to crack down on individuals fingered in high-profile corruption scandals, including the Gupta family, helped support the rand, analysts said. Late on Tuesday, the National Prosecuting Authority (NPA) denied it had issues any arrest warrants, but confirmed 17 investigations related to state capture were ongoing.
According to Bloomberg, the NPA’s Asset Forfeiture Unit, is looking to recover about R50bn worth of assets from the cases it’s pursuing, with six cases already in court.
Political developments locally could continue to affect the rand on Wednesday, as the ANC gears up for a national executive committee (NEC) meeting on Thursday.
In terms of local data, Statistics SA’s retail sales for November, also due on Wednesday, are expected to show growth of 4% year on year, compared with 3.2% in October.
South African retailers are in the process of releasing sales updates for December, with mixed results so far. An update from Woolworths on Monday disappointed the market, while TFG’s on Tuesday lifted its share price more than 5%.
The all share closed 0.68% higher at 60‚649.60 points and the blue-chip top 40 rose 0.65%. Banks added 3.02%‚ property 2.42%‚ general retailers 2.26%‚ financials 2.05%, and industrials 1.29%. The gold index shed 3.75%‚ resources 2.3% and platinums 2.09%.
The top-40 Alsi futures index closed 0.77% higher at 54,276 points. The number of contracts traded was 12,382 from Monday’s 10,406.
The Dow surged more than 1% at one point on Tuesday, crossing the 26,000-point barrier for the first time, lifted by a strong performance from Boeing, said Dow Jones Newswires.
At 5.40pm, the Dow was up 0.97% and the Nasdaq 0.9% while European markets were mixed: the DAX 30 had gained 0.78% while the FTSE 100 had lost 0.21%.
At the same time, platinum had gained 0.21% to $998.56 an ounce while gold had lost 0.36% to $1,334.49. Brent crude was off 0.77% to $69.65 a barrel.