Accelerating Chinese economy fails to lift JSE
Diversified miner BHP is under pressure after reporting lower iron ore production, but Clicks jumps after reporting solid turnover growth
The JSE weakened on Wednesday morning, despite some risk-on trade after China reported a better-than-expected economic performance in the first quarter.
A firmer rand was benefiting banks but putting some pressure on local miners. Corporate news also weighed on diversified miner BHP. At 10am, BHP had slid 2.99% to R339.61, having said earlier that it had lowered its production forecasts for iron ore, as it grapples with a hurricane that hit Western Australia earlier this year.
At the same time, the all share was down 0.16% to 58,806.7 points and the top 40 was down 0.15%. The resources index was down 2.01%, while banks had gained 1.08%.
The rand was 0.44% firmer at R13.971/$. Gold added 0.17% to $1,278.86/oz and platinum 0.9% to $888.24. Brent crude was up 0.14% to $71.98 a barrel.
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Earlier, sentiment was given a boost by news that Chinese economy grew 6.4% in the three months to end-March, only slightly faster than the 6.3% expected by the market. Analysts, however, cited much better-than-expected industrial production figures as a reason to be confident that Beijing’s stimulus measures were having an effect.
Locally, inflation came in better than expected, rising only 4.5% in March year on year compared with the 4.6% expected by the market.
Rand hedge AB InBev fell 1.63% to R1,236.53 and British American Tobacco 1.06% to R567.99. Richemont was up 1.02% to R103.70.
There was some corporate news to give markets direction on Wednesday.
Clicks surged 6.75% to R188.95. It earlier reported that group turnover grew 6.2% in the six months to end-February. Total income rose 8.9%, while diluted headline earnings per share (HEPS) grew 13.2% to 300.1c.
EOH jumped 26.07% to R25.44, extending its 55.23% surge on Tuesday. The company, which has been previously battered by allegations of impropriety, has implemented a turnaround plan. Its share has rocketed 130% so far in April.
Mediclinic jumped 6.28% to R59.94. It said earlier that in constant currency terms group revenue had risen 3.5% in the year to end-March.