Accelerating Chinese economy fails to lift JSE

The JSE weakened on Wednesday morning, despite some risk-on trade after China reported a better-than-expected economic performance in the first quarter.

A firmer rand was benefiting banks but putting some pressure on local miners. Corporate news also weighed on diversified miner BHP. At 10am, BHP had slid 2.99% to R339.61, having said earlier that it had lowered its production forecasts for iron ore, as it grapples with a hurricane that hit Western Australia earlier this year.

At the same time, the all share was down 0.16% to 58,806.7 points and the top 40 was down 0.15%. The resources index was down 2.01%, while banks had gained 1.08%.

The rand was 0.44% firmer at R13.971/$. Gold added 0.17% to $1,278.86/oz and platinum 0.9% to $888.24. Brent crude was up 0.14% to $71.98 a barrel.

Earlier, sentiment was given a boost by news that Chinese economy grew 6.4% in the three months to end-March, only slightly faster than the 6.3% expected by the market. Analysts, however, cited much better-than-expected industrial production figures as a reason to be confident that Beijing’s stimulus measures were having an effect.

Locally, inflation came in better than expected, rising only 4.5% in March year on year compared with the 4.6% expected by the market.

Rand hedge AB InBev fell 1.63% to R1,236.53 and British American Tobacco 1.06% to R567.99. Richemont was up 1.02% to R103.70.

There was some corporate news to give markets direction on Wednesday.

Clicks surged 6.75% to R188.95. It earlier reported that group turnover grew 6.2% in the six months to end-February. Total income rose 8.9%, while diluted headline earnings per share (HEPS) grew 13.2% to 300.1c.

EOH jumped 26.07% to R25.44, extending its 55.23% surge on Tuesday. The company, which has been previously battered by allegations of impropriety, has implemented a turnaround plan. Its share has rocketed 130% so far in April.

Mediclinic jumped 6.28% to R59.94. It said earlier that in constant currency terms group revenue had risen 3.5% in the year to end-March. 

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