MARKET WRAP: JSE rises 1% as diversified miners jump
Reports of further production cuts in Saudi Arabia supported diversified miners, but general retailers fell after disappointing sales figures for December
A strong performance by diversified miners kept the JSE positive on Wednesday, offsetting losses in property stocks and general retailers.
Glencore gained 3.44% to R53.54 and Anglo American 3.29% to R349.60, as the price of oil rose sharply on reports Saudi Arabia intended to cut production more than expected in 2019.
Rand hedges also surged, with Richemont adding 6.29% to R100.95, AB InBev 4.52% to R1,090 and British American Tobacco 4% to R506.26.
As the JSE closed, the rand was pushing towards R14/$, weakening to a one-month low.
General retailers, meanwhile, were under pressure from disappointing local data. On an annual basis, retail sales dropped 1.4% in December — much weaker than the consensus forecast for 2.7% growth.
The retail sales figures, together with most other recent data, indicate that SA's economic recovery remains weak and patchy, Nedbank Group Economic unit analysts said.
Mr Price slipped 1.62% to R206.92 and Shoprite 1.32% to R162.14.
The all share gained 1.08% to 54,543.2 points and the top 40 1.22%. The resources index jumped 3.22%, while general retailers fell 0.66% and the property index 0.77%.
Hyprop slumped 5.3% to R83.70. Earlier, it said Moody’s had lowered its investment-grade rating to junk status, citing debt-funded acquisitions in Eastern Europe that had increased its debt-to-asset ratio to 41% as of June 2018.
Global sentiment was risk-on, boosted by comments by US President Donald Trump that he may opt not to implement new import tariffs on China, even if a March 1 deadline for a new trade deal lapses.
US markets closed higher on Tuesday, also bolstered by news that legislators reached a tentative funding agreement to avoid a second partial government shutdown. Trump has received only part of his requested funding for a border wall, however.
Locally, SA’s largest labour federation, Cosatu, embarked on a one-day national strike. Load-shedding also continued for a third day on Wednesday.
Curro surged 9.35% to R27.12, having said earlier that headline earning per share (HEPS) for the year to end-December had risen 23% from the previous comparative period, to 60.1c.
Pan African Resources fell 0.53% to R1.87, despite having reported earlier that HEPS were expected to rise as much as 109% in the six months to end-December, mostly due to a depreciating rand. In rand terms, HEPS were expected to rise by between 8% and 18% compared with the same period in 2017.
Shortly after the JSE closed the Dow was up 0.62% to 25,585.97 points, while in Europe, the FTSE 100 had gained 0.84%, the CAC 40 0.65% and the DAX 30 0.57%.
At the same time, gold was up 0.56% at $1,317.93/oz and platinum 0.3% to $793.29. Brent crude had gained 1.68% to $63.62 a barrel.