MARKET WRAP: JSE boosted after ECB unleashes stimulus
Mining production increased by 2.4% year-on-year in July, from a contraction of 4.2% in June
The JSE closed higher on Thursday, tracking most global markets after the European Central Bank (ECB) announced efforts to boost economic activity.
The central bank cut its interest rate on the deposit facility by 10 basis points to -0.5%. It also announced the restart of quantitative easing, at a monthly pace of €20bn from November. The ECB’s decision comes just one week before the US Federal Reserve will give its latest stance on monetary policy, amid hopes that major central banks will begin an easing cycle.
“Although [ECB president] Mario Draghi has done ‘whatever it takes’ before he hands the mantle over to Christine Lagarde, it seems markets are disappointed with the ECB’s actions,” senior research analyst at FXTM, Lukman Otunuga said. “Given the concerns around the health of the eurozone economy, most were expecting Draghi to launch a monetary policy bazooka before his departure.”
The ECB said it expects key interest rates to remain at their present levels or lower until inflation picks up to a level close to or below 2%.
Shortly after the JSE closed, the Dow was up 0.19% to 27,187.43 points. The FTSE 100 lost 0.15%, while France’s CAC 40 added 0.13% and Germany’s DAX 30 0.12%.
Earlier, the Shanghai Composite and Japan’s Nikkei 225 both added 0.75%, while Hong Kong’s Hang Seng fell 0.26%.
At 5.17pm, the rand had firmed 0.56% to $14.5987/$, 0.29% to R16.118/€, and 0.62% to R17.9889/£. The euro had firmed 0.27% to $1.104.
Gold was up 0.95% to $1,510.80/oz and platinum 1.38% to $956.84. Brent crude dropped 2.28% to $59.64 a barrel.
The JSE all share rose 0.96% to 56,781.90 points and the top 40 0.81%. Banks gained 2.47% and platinum miners 5.76%.
Spur Corporation added 2.5% to R22.55 after the fast-food franchise group said on Thursday that its headline earnings per share (HEPS) increased by 10.8% to 173.68c in the year to end-June.
African Rainbow Capital (ARC) closed unchanged at R4.09. The company said on Thursday that its net asset value (NAV) grew 2.4% to R9.45 per share in the year to end-June.
Aspen Pharmacare jumped 10.97% to R94.25, its biggest one-day gain in more than 19 years, after the drug maker said on Thursday that it is set to sign a deal with an Indian company to provide it with the active pharmaceutical ingredients used for making HIV/AIDS drugs.
Silverbridge dropped 33.33% to 60c after reporting earlier that its HEPS dropped by 228% to 25.81c per share in the year to end-June.
Safari investments fell 0.19% to R5.17. The company said on Thursday that it has appointed an independent board to handle a takeover offer from ComProp.
Mining production increased by 2.4% year-on-year in July, from a contraction of 4.2% in June, data from Statistics SA showed on Thursday. This was above analysts’ expectations for an increase of 1%, according to a Bloomberg consensus.