MARKET WRAP: JSE marginally firmer after Reserve Bank announcement
The JSE gained on Thursday, after the Reserve Bank kept the repo rate on hold, but revised its inflation forecast downwards.
The dovish tone from the Bank benefited banks and retailers, which were also bolstered by a firmer rand. The local currency reached an intra-day best of R12.15 to the dollar, a level last seen in July 2015.
General retailers, recently buoyed by positive economic data and trading statements from individual companies, rocketed 4.36%. This was the best one-day performance by the index in almost two years.
Despite the Bank keeping its guidance of three 25 basis point rate increases by the end of 2019, the forward rate agreement (FRA) market was now pricing in rate cuts, said Capital Economics analysts.
Miners came under pressure, despite slightly firmer commodity prices, as did property stocks.
General retailers on the JSE rose 4.39%‚ banks 1.87%, and food and drug retailers 1.52%. The property index shed 2.06%‚ platinums 1.84% and resources 0.82%.The all share was up 0.13% at 61‚007.10 points shortly before the close‚ but due to technical difficulties the JSE was recalculating the final close of the all share and financial indices.
Sasol fell 3.86% to R435.
Steinhoff was up 5.02% to R6.91. It was announced in the day that Jayendra Naidoo would resign as director of Steinhoff International to focus more on his job as chairman of Steinhoff Africa Retail (Star). The latter gained 7.12% to R19.40.
Massmart climbed 3.21% to R144.50 after earlier announcing total annual sales to end-December from South African stores were up 1.5%‚ while comparable South African store sales declined by 0.2%.
Shoprite was 3.68% higher at a record R239.48‚ while Pick n Pay added 3.7% at R72.11 and The Spar Group 3.29% to R206.59.
In the property sector Nepi Rockcastle slumped 7.74% to R173.44.
Vodacom rose 3.02% to R149.27‚ while Naspers was down 0.98% to R3‚660.
The top-40 Alsi futures index lost 0.36% to 54‚338 points. The number of contracts traded was 15‚684 from Wednesday’s 22‚865.
At 6.17pm, the Dow had given up 0.32%‚ while European markets were mixed. The DAX 30 had added 0.59% while the FTSE 100 had lost 0.47% and the CAC 40 0.25%.
At the same time platinum had gained 0.37% to $1‚003.81 an ounce and gold 0.31% to $1‚330.10. Brent crude was off 0.22% to $69.26 a barrel.