JSE opens firmer on miners as risk-on rally boosts US markets

The JSE opened firmer on Thursday as risk-on trade boosted US markets, but trade in Asia was more subdued.

FxPro analysts said while the risk-on rally continued in global stocks, the Chinese markets were lagging behind over fears of trade tensions and high levels of maturing debt. “In stark contrast, US markets were higher.”

The Dow closed 1.4% higher on Wednesday. The Nikkei 225 rose 0.87%. The Shanghai Composte lost 0.18% and the Hang Seng rose 0.66%.

Brent crude was flat at $75.86 a barrel, with the platinum price slightly lower and gold marginally up.

Resources and retailers were the early gainers, but banks were also higher despite a weaker rand, trading around R12.74 to the dollar from R12.7118.

Banks and financials attracted buyers on the premise that the Reserve Bank will not hike interest rates soon, given the shocking GDP numbers earlier in the week. However, trade is expected to be volatile.

“The risk that the lousy GDP number brought forth, was that every release from now on would be combed over and had the potential to be market moving,” said TreasuryOne trader Andre Botha.

This was precisely the case on Thursday with the manufacturing data out later this afternoon, Botha said.

“With the mining and manufacturing sector being one of the culprits in the negative GDP print, a lot of scrutiny will be placed on the number this afternoon,” he said.

At 9.58am the all share was up 0.84% to 58,572.20 points and the top 40 rose 0.87%. Resources added 1.69%, general retailers 0.84%, the platinum index 0.74%, property 0.72%, industrials 0.69% and banks also 0.69%.

Anglo American rose 2.44% to R330.19 and BHP 1.59% to R306.09.

British American Tobacco rose 1.11% to R638.

Sanlam continued to lose out following the release of a disappointing trading update on Wednesday. It was down 2.49% to R73.62.

Steinhoff International rocketed 27.5% to R1.45 after it announced that creditors had given its European subsidiaries a lifeline, including a debt-standstill agreement through to the end of June. This could lead towards an overall debt agreement.

Growthpoint rose 1.18% to R27.41. It was earlier announced Estienne de Klerk would take over as CEO for SA from Norbert Sasse, who would assume a new role with a focus on the company’s offshore expansion.

Fortress B rose 1.68% to R16.94.

Naspers firmed 0.45% to R3,400.88.