JSE joins Asian market recovery, even as Brexit vote looms

The JSE was firmer on Tuesday morning, erasing Monday’s losses, amid some hopes that global markets are ticking higher after a torrid December.

Activity on US markets recently, as well as emerging-market resilience, has indicated the performance of risk assets in January may be more than just a correction from last month, analysts said. Sentiment has in recent weeks been boosted by positive US-China trade-war developments, as well as a dovish tone emanating from the US Federal Reserve.

Fresh promises from Chinese officials promising additional economic stimulus this year was also supporting sentiment, analysts said.

Gains on the local bourse on Tuesday were broad-based, with Naspers providing the most direction, adding 1.17% to R2,994.13. Gold miners were under pressure after rand gains overnight.

At 9.45am the all share was up 0.33% at 53,661.4 points and the top 40 0.49%. Industrials rose 0.57% and general retailers 0.77%. Gold miners gave up 2.39%.

Gold was flat at $1,290.61 an ounce and platinum at $805.20 an ounce. Brent crude was 0.66% firmer at $59.70 a barrel.

Risk events continue, with all eyes on UK Prime Minister Theresa May’s efforts to get her draft Brexit deal past lawmakers. May is widely expected to be defeated in a vote scheduled to start at 9pm SA time.

Should May be defeated as expected, the key question would then turn to the margin of this defeat, said BK Asset Management foreign exchange strategy MD Kathy Lien.

The rand is also expected to come under increasing pressure in coming weeks, despite having appreciated almost 4% against the US dollar so far in January.

On Tuesday morning Brait had recovered 2.48% to R25.62. It plunged 21.48% on Monday after saying earlier it would cut its shareholding in New Look to between 18% and 30% by issuing shares to creditors.

Anglogold Ashanti was down 2.5% to R172.58 and Gold Fields 2.48% to R49.21.

Sibanye-Stillwater gave up 1.92% to R10.21. Earlier in the day it received notice that the Association of Mineworkers and Construction Union (Amcu) intended to go on a secondary strike at its platinum operations from next week Tuesday. Amcu has been on strike at the company’s gold operations since November 21 2018. 

Ascendis Health gave back 4.52% to R5.92. It rocketed 12.52% to R6.50 on Monday, after it reported that a buyer had expressed interest in its Cyprus-based Remedica unit, which it acquired two years ago for €335m.

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