MARKET WRAP: Rand and JSE gain on generally positive international markets
The US Fed is unlikely to cut interest rates again in the near term, following three cuts earlier this year, with its decision expected later on Wednesday
The JSE ended in positive territory on Wednesday as global markets rose ahead of the outcome of the US Federal Reserve’s policy meeting, with the Fed expected to keep interest rates unchanged at its last meeting for 2019.
The latest US economic data supports no change in interest rates, with analysts concurring. Inflation in the world’s largest economy came in higher than expected in November, while employment figures released last week were better than expected.
The Fed is unlikely to cut interest rates again in the near term, following three cuts earlier this year.
Locally, the latest inflation and retail sales data were released earlier on Wednesday with the former coming in better than expected, while the latter disappointed.
Consumer inflation slowed to its lowest levels since December 2010, Statistics SA said earlier. Annual growth in consumer prices, as measured by the change in the consumer price index (CPI), slowed to 3.6% in November, down from 3.7% in October.
“Since the end of 2016, inflation has been on a downward trend, and has remained firmly within the SA Reserve Bank’s 3%-6% monetary policy range since April 2017,” the agency said.
Retail sales growth slowed marginally in October on revised figures, reaching the lowest level in seven months, Stats SA said. Annual growth in retail sales slowed from a revised 0.4% in September to 0.3% in October, below expectations. A Bloomberg poll of nine economists had forecast growth of 0.6%. On a month-on-month, seasonally adjusted basis, retail sales contracted 0.2%.
At 7.24pm, the rand had strengthened 0.59% to R14.6999/$, after weakening 0.81% on Tuesday after Eskom laid bare the dire situation of power generation in the country. It gained 0.69% to R16.2933/€ and 0.57% to R19.3614/£. The euro was flat against the dollar at $1.1093.
Shortly after the JSE closed, the Dow had fallen 0.18% to 27,830.33 points. In Europe, the FTSE 100 was up 0.03%, Germany’s DAX 30 0.58% and France’s CAC 40 0.22%.
Gold was up 0.43% to $1,470.88/oz and platinum 2.08% to $936.51. Brent crude dropped 0.81% to $63.66 a barrel.
The JSE all share gained 0.63% to 55,766.5 points with the top 40 rising by the same margin. Banks recovered 1.06% and financials 0.33%. Miners continued their march upwards, with resources adding 1.12%, the gold index 3.36% and platinums 3.89%.
Glencore did best of the diversified miners, adding 0.69% to R42.44. It was followed by BHP’s 0.52% gain to R335.87 and Anglo American’s 0.38% to R408.05.
AngloGold Ashanti rose 3.66% to R298.93 and Harmony 2.64% to R47.85.
Sibanye-Stillwater leapt 6.12% to R34, Impala 5.79% to R139 and Northam 3.86% to R122.55.
Absa led gains among the big four in its sector, up 1.33% to R146.63, with FirstRand adding 1.23% to R61.92, Standard 1.04% to R162.86 and Nedbank 0.69% to R213.30.