MARKET WRAP: JSE closes higher as rand comes off weakest levels
The JSE closed firmer on Monday as a steady rand supported banks and retailers, while miners lost ground as the oil price weakened.
The rand threatened to weaken through R12.10 to the dollar, before recovering on a firmer euro. The stronger currency had a positive effect on local banking and retail shares, with a strong opening on the Dow encouraging risk-on trade.
At the JSE’s close the Dow was 0.75% higher, as company earnings beat expectations. European markets were generally softer.
Rand hedges were mixed with Naspers regaining some ground to trade above R3,000 a share. At the close it was up 1.5% to R3,040.
However, overall volumes were light following the US-led air strikes on Syria at the weekend, despite the attacks appearing to be a once-off event.
The all share closed 0.30% higher at 56,733.50 points and the top 40 gained 0.48%. Banks rose 1.17%, industrials 0.72%, food and drug retailers 0.55% and general retailers 0.44%. The platinum index dropped 3.32%, the gold index 1.55%, resources 0.5% and property 0.27%.
Steinhoff closed 6.02% lower at R2.03.
Resilient shed 0.66% to R62.96 and Fortress B 2.27% to R15.48.
Hammerson gained 3.41% to R83.91 after the property group said it was going ahead with its planned Intu takeover despite it receiving a revised offer from French group Klépierre last week.
The rand was at R12.0771 at the JSE’s close and the euro at $1.2367 from $1.2334.
The dollar lost ground despite upbeat US data released on the day. US retail sales grew 0.6% in March compared with February, outpacing the 0.4% growth expected in a Trading Economics consensus forecast.
This is the first time retail sales have seen growth since November, with the number being closely watched as markets consider how fast the US Federal Reserve will raise interest rates in 2018.
Local bonds were marginally weaker with the R186 bid at 8.09% from 8.07%. The US 10-year treasury was last seen at 2.8502% from 2.8253%.
Bonds have benefited from the rand’s new-found safe-haven status, but came under some pressure in intraday trade.
Capital Economics analysts said in a note financial risks remained low in the emerging world, but currency vulnerabilities had increased in a handful of countries. "We have long-term concerns over fiscal positions in a number of emerging markets, including SA."
The top 40 Alsi futures index added 0.35% to 50,604 points. The number of contracts traded was 10,942 from Friday’s 17,188.