JSE opens flat as banks and retailers bounce back on rand

The JSE opened flat on Tuesday as a stronger rand had a negative effect on rand hedges and miners, but banking, retailer and property stocks were up in early trade.

Market sentiment was fragile after the ANC made it clear it is pushing ahead with controversial land reform measures. Its economic transformation subcommittee recommended the inclusion of expropriation without compensation in the Expropriation Bill.

The rand gained about 15c against the dollar from overnight trade, as the euro recovered some lost ground against the greenback.

“We expect the dollar bull market to correct and emerging-market equities to find support, but the stronger rand will leave the JSE vulnerable,” said Nedbank Corporate and Investment Banking trader Neels Heyneke.

The rand was at R12.5520 to the dollar from R12.6748 soon after the JSE commenced trading.

The Dow started the week on a high note, rising 1.21% on Monday as tension on a possible trade war with China calmed down and China committed itself to increased purchases of US goods.

European markets were firmer, with the FTSE 100 trading at an annual high.

Asian markets were mostly negative with the Nikkei 225 off 0.18%. The Hang Seng is closed for a public holiday.

Brent crude was marginally up at $79.64 a barrel.

At 10.01am the all share rose 0.03% to 57,840.30 points and the top 40 was also up 0.03%. Banks rose 2.13%, general retailers 0.87%, financials 0.82%, food and drug retailers 0.65% and property 0.48%. The gold index shed 1.49% and resources 1.17%.

Anglo American was down 1.24% to R322.26 and Sasol 0.69% to R479.03.

Sibanye-Stillwater lost 0.23% to R8.66 and Lonmin 1.2% to R8.20.

Capitec rose 0.55% to R849.24. Viceroy Research released another research report, accusing the group of continuing to mislead its investors with respect to its financial position, on the same day the banking group announced it was entering the funeral policy market.

Murray & Roberts lifted 0.31% to R16, but Aveng plummeted 11.30% to 71c.

Hammerson shed 1.31% to R94.36.

Rhodes Food was 0.22% lower at R17.98. Headline earnings per share (HEPS) for the six months to end-April dropped 39% to 31.4c due to the dilution caused by the issue of shares to pay for the acquisition of Pakco.

Naspers added 0.45% to R3,194.59.