JSE benefits as rand recovery supports banks

The JSE closed firmer on Wednesday in topsy-turvy trade as a recovering rand supported banks later in the day, while retailers retreated in risk-off trade.

Miners were higher, led by platinums, despite the stronger rand, as firmer commodity prices boosted sentiment. Brent crude had softened to $74.77 a barrel by the JSE’s close. At the same time platinum had risen 0.43% to $906.91 an ounce and gold 0.26% to $1,299.75.

Losses against the dollar were relatively contained on the day, as the market continued to digest data suggesting SA’s growth forecast for 2018 required downward revision.

After being weaker for most of the day the local currency turned around in later trade as the euro firmed against the dollar amid reports that the European Central Bank (ECB) intended continuing with unwinding its monetary stimulus, despite the recent problems in Italy.

SA’s economy contracted a quarterly 2.2% in the first quarter despite a consensus prediction by analysts of a 0.5% fall.

Sentiment toward risk assets was still upbeat, said Rand Merchant Bank analyst Michelle Wohlberg. “Some recovery was to be expected as markets found their feet following Tuesday’s blow-out.”

The Dow was 0.4% higher at the JSE’s close, while European markets were lower on a firmer euro, which affects exports from the eurozone.

The JSE all share closed 0.52% higher at 58,081.90 points and the top 40 added 0.63%. The platinum index lifted 1.7%, resources 1.16% and industrials 0.82%. Food and drug retailers lost 0.67% and financials 0.64%.

Anglo American pared strong earlier gains but still closed 1.38% higher at R322.34, having earlier gained more than 3%.

Impala Platinum lifted 5.44% to R21.72, after announcing increased opportunities at its Zimplats operations.

Sanlam plummeted 6.25% to R75.50 as the market reacted negatively to the group’s latest four-month operational update for 2018. Normalised headline earnings per share rose 5% over the period.

Steinhoff International closed 2.56% lower at R1.14 while Steinhoff Africa Retail (Star) lost 0.42% to R16.55. Tekkie Town said on Tuesday it would be suing the retailer, but Star has said it will not be held liable for any agreement between Tekkie Town and Steinhoff International.

Fortress B gained 0.97% to R16.66. It has set its sights on becoming SA’s leading logistics property company.

Naspers was up 2.69% to R3,385.56, the fifth consecutive day of gains for the market heavyweight.

The top 40 Alsi futures index gained 0.79% to 51,954 points. The number of contracts traded was 19,545 from Tuesday’s 23,475.