MARKET WRAP: JSE has best day in a week as virus worries fade
The rand turned negative after retail sales declined 0.4% year on year in December from an increase of 2.6% previously
The JSE gained for a second consecutive day on Wednesday as hope that the spread of the coronavirus will soon peak lifted global market sentiment.
China said on Tuesday that the number of new cases reported was at its slowest since January 30, with China’s senior medical adviser saying the spread of the virus could peak this month. The death toll had climbed to more than 1,100 on Wednesday.
“There remains a thick cloud of uncertainty over how badly the outbreak has impacted China, Asia and the global economy. With the death toll from the virus topping 1,000 with more than 45,000 confirmed cases, investors are likely to remain wary and cautious despite the apparent ‘risk-on’ mood,” senior research analyst at FXTM Lukman Otunuga said.
“The positive vibe from Asian markets may support European shares and potentially trickle back down to Wall Street which closed at fresh, record highs overnight.”
Shortly after the JSE closed, the Dow was up 0.72% to 29,487.27 points, while in Europe the FTSE 100 had added 0.49%, France’s CAC 40 0.73% and the German DAX 30 0.83%.
Earlier, the Shanghai Composite rose 0.87%, Hong Kong’s Hang Seng 0.87% and Japan’s Nikkei 225 0.74%.
The rand had turned negative by Wednesday evening, after Statistics SA reported retail sales declined 0.4% year on year in December, from an increase of 2.6% in the previous month. The yearly figure indicates 2019 was the worst for the sector since 2009.
At 6.20pm, the rand had weakened 0.11% to R14.8138/$, was flat at R16.1364/€ and 0.20% softer at R19.2171/£. The euro had lost 0.22% to $1.0894.
The JSE all share gained 1.34% to 57,744.13 points, the top 40 1.56%, resources 2.30% and industrials 0.93%.
Among diversified miners, Anglo American gained 4.72% to R413.04, Glencore 2.69% to R46.15, and BHP Group 1.31% to R326.88.
Tiger Brands’ share price dropped to a seven-year low during intra-day trade after the company said on Wednesday that it expects headline earnings per share (HEPS) from total operations to decrease by between 30% and 37% in the six months to end-March 2020. Its share price closed 5.58% lower at R188.
Barloworld earlier reported that its revenue had decreased in the three months to end-December 2019 due to a sluggish economy. It reported overall equipment sales were down for the period, while automotive trading also declined due to continued pressure on new and used unit sales. Its share price fell 0.22% to R99.76.
DRDGold declared a dividend for the 13th year on Wednesday, while its operating profit jumped 604% to R719.6m in the six months to end-December 2019. Its share price, however, fell 2.26% to R9.10.