JSE closes slightly higher in light-volume US holiday trade

The JSE closed marginally higher on Wednesday as the market sought direction in a low-volume trading environment, with banks leading at the close on a range-bound rand.

Markets in the US were closed for a public holiday. European markets were lower as the dollar recorded marginal gains against the euro.

Just R9.8bn was traded on the JSE, where an average trading day turns over about R24bn.

The local market looked to UK markets for direction. The FTSE 100 was under pressure for most of the day on a firmer pound and despite the UK IHS Markit/CIPS services purchasing managers index (PMI) rebounding after four weak months, rising to 55.1 in June and beating forecasts.

Analysts said UK investors stayed on the sidelines ahead of a crucial Brexit summit on Friday at Chequers, the UK prime minister’s country house.

Prime Minister Theresa May has indicated she was looking toward a third way with Brexit in order to appease hardline Brexiteers and those favouring a softer Brexit. This has angered some Brexiteers, raising the possibility of a split in the Conservative Party amid a lack of progress on the Irish border issue.

“The UK is the world’s least-loved major market — but it’s not all Brexit’s fault,” DeVere group analyst Tom Elliott said.

He said the UK was at the bottom of global investors’ list of favoured developed markets, with the UK economy growing at 1.2%, compared to the 2.5% in the euro area, to the end of June.

“Until we have a clear signal from the UK government about what sort of Brexit it wants (‘hard’ or ‘soft’), the momentum among investors will likely be to stay clear of the UK market,” Elliott said.

The FTSE 100 is down 1.23% in 2018, after rising 7.63% in 2017.

However, Capicraft Investment Partners analyst Drikus Combrinck said the UK market may be presenting buying opportunities at present levels. “Most of the Brexit consequences have probably been priced in, with some second-tier companies looking attractive.”

These included property companies with a focus on the European market, he said. Some of these stocks had been heavily downgraded after Brexit, and offered value now.

The all share closed 0.19% higher at 57,600 points and the top 40 rose 0.17%. Banks firmed 1.49%, financials 1.24%, the gold index 1.08% and property 0.17%. General retailers dropped 0.95% and resources 0.85%.

Glencore shed a further 1.28% to R57.79, after plummeting more than 8% on Tuesday. It has been served with a subpoena by the US department of justice in a broader money-laundering investigation.

Anglo American rose 2.21% to R303, while BHP fell 2.77% to R295.65.

Barclays Africa gained 1.96% to R166.97 and Capitec 2.43% to R873.75.

Steinhoff took a breather, after rocketing 31% on Tuesday, closing 2.22% lower at R1.76.

Intu Properties rose 2.6% to R33.17 and Capital & Counties 0.85% to R52.01.

Naspers was down 0.2% to R3,408.