MARKET WRAP: JSE has its best day since June on hopes of a US-China trade deal
Banks made a strong recovery on Friday after a difficult week, with Absa leading gains among the big four
The JSE capped its best day in more than six months on Friday after US President Donald Trump said the US and China are close to signing the first phase of a trade deal.
Trump tweeted earlier that both countries were pushing to finalise the phase-one deal, giving investors hope that the uncertainty around the year-and-a-half-long trade war would be put to rest.
Global markets were mostly positive on Friday, reacting favourably to the outcome of the UK elections in which Boris Johnson’s Conservative Party won a bigger majority than expected.
“The outcome of the snap UK general election provides a strong political mandate for the now re-elected Conservative Party government to pass the necessary legislation through parliament in time to leave the EU formally on January 31 and to initiate the first phase of Brexit,” said North West University professor Raymond Parsons. “Britain will then move into transition, during which its EU membership will, nevertheless, in effect continue in terms of the negotiated withdrawal agreement.”
The JSE had its best day since June 7, with the all share gaining 1.66% to 56,749.1 points and the top 40 1.81%. Banks were up 3.85% and financials 2.82%. The general mining index rose 0.38% with resources adding 0.8%. After strong recent runs, the gold and platinum indices took a breather, down 3.68% and 0.59%, respectively.
Despite turning a little negative late on Friday, the rand capped its best week in four on the positive global momentum. At 6.25pm it had weakened 0.31% to R14.5389/$, 0.27% to R16.1791/€ and 1.53% to R19.3851/£. The euro was flat at $1.1127.
Shortly after the JSE closed, the Dow had slipped 0.24% to 28,074.16 points. In Europe, the FTSE 100 was up 1.1%, France’s CAC 40 0.68% and Germany’s DAX 30 0.42%.
Gold was 0.53% higher at $1,477.47/oz while platinum had fallen 1.72% to $926.63. Brent crude added 0.82% to $64.87 a barrel.
EOH said on Friday that it had exceeded its R1bn disposal target for 2019 as it sought to reduce debt and slim down a business that has been hard hit by corporate governance issues recently. The technology group said that it had agreed to sell Dental Information Systems to AfroCentric for R250m, the latest disposal by a group that lost a major contract with US software giant Microsoft earlier in 2019. Its share price was up 0.98% to R12.37, but is still down nearly 60% in 2019.
Banks made a strong recovery on Friday after a difficult week, with Absa leading gains among the big four banks, leaping 5.14% to R152.88. Standard added 4.36% to R169.50, FirstRand 3.39% to R64.10, and Nedbank 2% to R216.90.