MARKET WRAP: JSE up on improved global sentiment and positive local data

An improved mood on global markets and positive local data helped lift the JSE on Tuesday, with the local bourse recovering more than Monday’s losses.

A rebound by Naspers ensured industrials led the gains, although diversified miners and Sasol performed well, amid a rebounding oil price, as supply disruptions in Libya loom.

The all share rose 1.49% to 51,188 points and the top 40 1.84%. Industrials rose 2.02% and resources 1.66%. Gold miners lost 0.52% and platinums 0.42%.

Global sentiment improved amid reports that the US and China had resumed trade negotiations, with US President Donald Trump tweeting this is “very productive” and adding that there would soon be “important announcements”.

Naspers added 3.68% to R2,851.11. 

Local news, likewise, was positive, with both mining and manufacturing data beating expectations in October.  Manufacturing jumped 3% compared to the same period last year, well ahead of a consensus poll conducted by Trading Economics of 0.8% growth.

Mining data was also positive, growing 0.5% in October, ahead of a consensus forecast of a 1.5% decline.

The latest mining production numbers indicated further recovery — albeit off a low base — in economic growth in the final quarter of the year, said Nedbank Group Economic Unit analysts in a note. “The recovery we are forecasting, however, does not point to significant underlying upward momentum yet, which means that demand pressures on prices will remain relatively subdued,” they said.

The rand was little changed ahead of the manufacturing data, but swiftly gained a few cents shortly after it was released. However, trade in the local currency was choppy by the JSE’s close.

Diversified miner Anglo American gained 3.34% to R297.53. Earlier, the company said it would exceed its production guidance for 2018 by 2%, while costs were expected to fall 5%.

Glencore added 2.53% to R51.37. Sasol rose 2.39% to R423.56.

Rand hedge Richemont added 2.46% to R93.20.

Alexander Forbes rose 0.41% to R4.90, having earlier reported a net interim loss of R47m to end-September, from a profit of R324m previously. Headline earnings per share (HEPS) declined 23% to 16.7c, largely as a result of a R287m impairment of a software development project.

Reinet jumped 4.89% to R226.14. It has recently been buying back some of its own shares.

Shortly after the JSE closed, the Dow was up 1.08% at 24,691.65 points, while in Europe, the FTSE 100 had gained 1.76%, the CAC 40 2.21% and the DAX 30 2.33%.

At the same time, gold was flat at $1,245.23 an ounce while platinum was up 0.39% at $785.55. Brent crude was 2.01% higher at $61.01 a barrel.

gernetzkyk@businesslive.co.za