MARKET WRAP: JSE continues broad-based recovery
Strong risk-on global trade lifts the local bourse, with general retailers taking the lead, while gold miners and some resources slip on a stronger rand
The JSE posted broad-based gains on Wednesday, but closed well off its intraday high, fuelled by strong risk-on global trade as a result of the US midterm elections.
Global markets have sighed with relief that the election passed as expected, with investors finding reasons to push higher, despite the possibility of legislative gridlock in Washington.
Gold miners were the biggest losers, as the rand pushed below the psychologically important R14 to the dollar level.
The all share rose 0.46% to 54,700.6 points and the top 40 0.36%. General retailers added 3.06% and banks 2.3%. Gold miners lost 2.06%.
Analysts expect market focus to shift back to issues of economic fundamentals, as well as those of the US-China trade conflict.
The JSE has recovered strongly so far in November, after a dismal performance in September and October. This correction is expected to continue, and the all share should test the 56,000-points level, Nedbank Corporate and Investment Banking strategists Neels Heyneke and Mehul Daya say.
“We expect this rally to be a goodbye kiss, and only [a] sustained break back into the original bull [run] will force us to change our view,” the strategists said in a note.
Global exchanges were buoyant, with US markets opening firmly higher after the midterm elections. Issues of trade relations with China are returning to the spotlight, with some focus also on the US Federal Reserve policy announcement on Thursday.
Some bad news came in the form of a rising oil price, fuelled by indications that oil cartel Opec and other major oil producers meeting at the weekend may discuss cutting oil production levels, in order to boost sagging prices, reported Dow Jones Newswires.
Diversified miner Glencore fell 1.23% to R58.01.
Rand hedge British American Tobacco jumped 3.22% to R630.68. partially making up for Tuesday's 4.23% slump.
Anglo American Platinum firmed 5.49% to R506.40, having said earlier it had completed the acquisition of Glencore’s 40.2% stake in the Mototolo joint venture for R900m.
FirstRand gained 2.68% to R71, Standard Bank 2.29% to R181.22 and Absa 2.07% to R162.75.
Woolworths jumped 5.68% to R56.21 and Mr Price 4.92% to R248.76.
TFG added 0.43% to R166.50, ahead of its interim results to end-September on Thursday. In the prior period, the retailer reported headline earnings per share of 504.9c, declaring an interim dividend of 325c per share.
Naspers lost 1.08% to R2,878.46.
Shortly after the JSE closed the Dow was up 0.74% to 25,821.32 points, while in Europe, the FTSE 100 had gained 0.9%, the CAC 40 1.02% and the DAX 30 0.63%.
At the same time, gold had risen 0.22% to $1,229.53/oz and platinum 0.63% to $875.26. Brent crude was 1.07% higher at $72.46.