MARKET WRAP: JSE pushes above 57,000 points as banks jump

The JSE pushed higher in broad-based gains on Monday, tracking gains in global markets.

Chinese data was responsible for the improved mood globally, with a private gauge of manufacturing activity earlier surprising to the upside — and reaching an eight-month high.

Locally, Moody's Investors Service opted not to release a report on SA’s credit rating, providing a boost to domestic sentiment, which, in turn, helped to support local bonds and the rand.

As the JSE closed, the rand had gained 1.27% to R14.1609/$ and 1.42% at R15.8927/€. This benefited banks, who often gain on a firmer rand. The banking index had its best day in four months.

The all share added 1.15% to 57,109.6 points and the top 40 rose 1.2%. Banks added 3.72%, financials 2.38% and general retailers 2.39%. Gold miners lost 2.99%.

Kumba Iron Ore gained 4.35% to R449.

Standard Bank jumped 4.48% to R193.53, Absa 4.54% to R159 and Nedbank 4.01% to R261.32.

Mr Price leapt 3.57% to R196.29 and TFG 3.56% to R168.80.

Rand hedge British American Tobacco fell 2.59% to R582.39 and AB InBev 2.22% to R1,184.16.

Local news on Monday was somewhat downbeat, with the seasonally adjusted Absa purchasing managers’ index (PMI) falling for a third consecutive month, to 45 points in March, from 46.2 in February.

Absa said the period saw a deterioration in exports, while local business conditions also remained poor.

The JSE underperformed relative to global peers in the first quarter of 2019, with analysts citing tepid local economic conditions.

The all share index rose 7.1% in the first quarter, amid a global equity rally prompted by a dovish turn by the US Federal Reserve. The MSCI emerging-markets index added 9.6% over the three-month period, while the Dow gained 11%.

JSE gains were largely due to a strong showing by local miners as well as Naspers, while locally focused shares continued to be under pressure from poor domestic economic conditions, load-shedding, and policy uncertainty, said Lester Davids, a trading desk analyst at Unum Capital.

“Ahead of the election, there may very well be a sense of nervousness among local and international investors, which can be seen in the performance of local counters.”

Global focus remains on Brexit, with the UK parliament expected to conduct a series of votes this week as it struggles to find consensus on a way forward.

US-China trade negotiations are also in the spotlight. Chinese officials are travelling to Washington this week in order to continue last week’s talks.

Shortly after the JSE closed, the Dow was up 0.92% at 26,164.81 points, while in Europe, the FTSE 100 had gained 0.58%, the CAC 40 1.01% and the DAX 30 1.23%.

Gold was flat at $1,292.38/oz, while platinum had added 0.45% to $855.08. Brent crude was 1.38% higher at $68.52 a barrel.

gernetzkyk@businesslive.co.za