MARKET WRAP: JSE rebounds as global markets rally
The JSE all share rebounded on Friday on positive international developments, but retailers continued their slide.
Positive developments in US-China trade talks have buoyed global markets, despite increasing concerns about slowing global economic growth.
The all share climbed 0.55% to 53,731.5 points and the top 40 lifted 0.61%.
General retailers extended Thursday’s losses, falling 0.84%, while Resources rose 1%. Gold miners lost 1.68% and banks 0.07%, but food and drug retailers added 0.46%.
Chinese vice-premier Liu He is set to meet US officials in Washington on January 30 and 31 for the latest round of trade talks aimed at resolving the trade stand-off between the world’s two largest economies. This is despite the US delegation pulling out of the World Economic Forum in Davos next week as the US government shutdown nears the end of its first month, the longest on record.
Analysts say emerging-market assets still face some obstacles on escalating political uncertainty in the UK as Brexit remains unresolved, and deteriorating global growth prospects led by weaker numbers from China.
The Chinese GDP growth figures for 2018 will be released at 4am on Monday: the Bloomberg consensus is 6.4%.
Local data in the coming week includes consumer inflation and confidence, which will provide insight into the pressure consumers have come under in recent months. Reserve Bank governor Lesetja Kganyago said on Thursday that inflation is expected to moderate and remain within the 3% to 6% target range over the medium term.
Some retailers, which had been relying on the festive season and Black Friday to bolster their bottom line, released disappointing trading updates on Thursday, causing massive drops in some of their share prices. On Friday, Mr Price slumped another 3.21% to R208.97, while Woolworths recovered to 1.64% to R49.44, after falling earlier in the day. TFG, which released a pleasing update, fell 1.03% to R175.49, after gaining on Thursday.
Brait lost 8.48% to R26.02 while Tiso Blackstar, which owns Business Day, plummeted 21.83% to R3.51.
AngloGold Ashanti fell 3.54% to R169.61, as the gold price dropped. GoldFields was flat at R49.53.
Aveng’s share price remained at 5c after it announced it had sold its water division for an undisclosed amount in a private equity-backed management buyout. The construction group said the buyers were Aveng Water MD Suzie Nkambule and Infinity Partners, the latter described as a 100% black-owned company jointly held by E Squared Investments.
Shortly after the JSE closed, the Dow was up 0.58% at 24,370.1, while in Europe the FTSE 100 had risen 1.78%, the CAC 40 1.56% and the DAX 30 2.02%.
At the same time, gold had lost 0.61% to $1,284.09/oz while platinum had fallen 1.05% to $798.81. Brent crude was 1.24% higher $61.96 a barrel.
Against other major currencies, the rand was 0.65% weaker at R13.8085/$, down 0.53% to R15.7081/€ and 0.13% at R17.8375/£.