JSE sharply up at the opening as Dow hits new high on government deal
The JSE opened firmer on Tuesday at a record high as rand hedges rallied, led by Naspers, amid upbeat global markets.
The Dow closed 0.55% up at 26,214.60 after the Senate reached a compromise deal to keep the government open through February 8.
Asian markets followed suit, and received further support from news out of China news that the country was considering more tax cuts to sustain economic growth.
Earlier reports stated that the Chinese commerce ministry expressed strong dissatisfaction regarding US tariffs of 30% on solar imports and washing machines.
FxPro analysts said the message was that China would resolutely safeguard its own interests. "South Korea has also responded to the US trade tariffs by saying they will look to reinstate tariffs on US goods and services," FxPro said.
Asian markets rallied on the news. The Nikkei 225 rose 1.29% and the Hang Seng 1.48%, led by Chinese internet company Tencent up more than 2%. Naspers gained in response, as it owns about a third of Tencent.
Rand hedges, together with miners, were also supported by the view the rand may be heading for some correction after the recent strong run, following reports that no decision had been taken by the ANC to actually remove President Jacob Zuma as head of state.
However, banks and retailers remained in positive territory on prospects that the Reserve Bank might cut interest rates in 2018.
The likelihood of further credit-ratings downgrades has also decreased. Barclay’s Research analysts said on Monday that they had changed their outlook for agency Moody’s March ratings decision to no downgrade.
Property stocks staged a recovery after four consecutive closures in the red.
At 9.36am the all share was 0.7% up at 61,485 points and the blue-chip top 40 index added 0.73%. Food and drug retailers rose 1.26%, banks 0.84%, financials 0.8%, industrials 0.77% and general retailers 0.47% and property 0.29%.
Sasol gained 1.75% to R446.94 on a flat Brent price, which hit $69.42 a barrel soon after the JSE’s opening. Sasol said its headline earnings per share (HEPS) for the six months to end-December was set to rise as much as 17%.
Naspers rose 0.9% to R3,765.07.
British American Tobacco was up 0.64% to R854.93.
Barclays Africa rose 1.31% to R185.40, FirstRand 0.83% to R67.05 and Standard Bank 0.55% to R201.
Steinhoff added 0.49% to R8.24 in volatile trade. The group jumped 10% on Monday following news that it was putting 29.5-million of its PSG shares up for sale.
Shoprite rose 1.52% to R242.
Growthpoint firmed 0.785 to R28.27 and Greenbay 1.05% to R1.92.