MARKET WRAP: JSE closes higher, as rand loses earlier gains

The JSE closed marginally higher on Tuesday, with banks and financials leading the gains.

Investors were closely watching US retail sales data, released earlier in the day, as markets look for any catalysts that will encourage the US Federal Reserve to cut interest rates more sharply than expected at its next meeting.

Retail sales for June in the US rose 0.4% month-on-month, unchanged from May, and double the 0.2% expected by analysts in a Bloomberg poll. Industrial production month-on-month was also unchanged from 0.4% previously.

Shortly after the JSE closed, the Dow was flat at 27,376.72 points after closing at a record high on Monday. In Europe, the FTSE 100 rose 0.6%, France’s CAC 40 0.71%, and Germany’s DAX 30 0.42%.

The rand ended its recent winning run after the better-than-expected US retail sales data provided a reprieve for the dollar. After the JSE closed, the rand had weakened 0.15% to R13.9214/$, while it had strengthened 0.23% to R15.6136/€ and 0.76% to R17.2731/£. The euro had weakened 0.37% to $1.1216.

Investors now await the Reserve Bank’s decision on Thursday, with speculation that it may cut the interest rate by 25 basis points. 

“With an expectation of a rate cute on Thursday, we could see a knee-jerk weakening for the rand based on the yield-seeking behaviour of the market at the moment,” TreasuryONE senior currency dealer Andre Botha said in a note.

Gold was last seen down 0.29% to $1,409.59/oz while platinum gained 0.7% to $849.99. Brent crude had gained 0.65% to $66.56 a barrel.

Earlier, the Shanghai Composite fell 0.16% and Japan’s Nikkei 225 0.69%, while Hong Kong’s Hang Seng gained 0.23%.

The JSE all share rose 0.9% to 58,052.70 points and the top 40 0.99%. Banks gained 1.81% and financials 1.28%.

Standard Bank rose 2.2% to R192.14, Absa 2.02% to R172, FirstRand 1.65% to R65.99, and Nedbank 1.49% to R250.23. 

Sasol gained 3.35% to R337.86. 

Alexander Forbes rose 2.88% to R6.07, Sanlam 2.32% to R77.55, and Discovery 1.33% to R143.75. 

Old Mutual rose 1.57% to R22. On Tuesday, the South Gauteng High Court postponed the hearing of the matter between the company and its fired former CEO Peter Moyo to Thursday.

Anglo American Platinum gained 1.24% to R805.95 after it said its earnings per share for the six months ended June will likely increase by between R26.90 and R28.54 from 831c in the previous period.  

Nepi Rockcastle rose 0.5% to R129.50 after the property company said on Tuesday that it had signed a non-binding letter of intent with with AFI Europe to conduct a due diligence on four Romanian office buildings.

EOH fell 0.77% to R20.70. The technology group said an investigation into its past dealings with the government uncovered “suspicious transactions” worth R1.2bn.

Statistics SA is scheduled to publish retail sales data for May on Wednesday, with a Bloomberg consensus of a 1.7% year-on-year rise, compared with 2.4% in April. The eurozone is expected to release its inflation rate for June on Wednesday.

mjoo@businesslive.co.za