JSE opens higher as Dow aims for record territory

The JSE opened firmer on Tuesday after the Dow closed above 26,000 points on Monday, rising more than 1% on the day following US President Donald Trump’s confirmation that the US had reached a preliminary trade deal with Mexico.

Asian markets were mostly firmer, with the Nikkei 225 rising 0.06% and the Hang Seng 0.26%. The Shanghai Composite dropped 0.10%.

The Dow reached a record high on January 26, when it closed at 26,616.71 points. Both the S&P 500 and the Nasdaq have closed at record highs over the past few sessions.

The euro firmed to $1.17 as strong German data also supported the European currency.

Market sentiment favoured exposure to risky assets, with the JSE gaining from a relatively dovish stance by the US Federal Reserve.

The trade agreement replaces the North American Free Trade Agreement (Nafta), which was a deal involving the US, Canada and Mexico. Canadian foreign minister Chrystia Freeland is on her way to Washington to join the talks in the hope of extending the US-Mexico trade agreement to include Canada.

The Trump administration said it would give Canada until Friday to iron out crucial differences. Dow Jones Newswires reported that Trump “might prefer to block Canadian imports rather than negotiate a new pact”.

Analysts cautioned against a overly optimistic position in emerging markets. The short-term technical picture suggests risks could be upended by unexpected turns in the rhetoric on international trade negotiations, FxPro analysts said.

They said the harsh rhetoric of the US, and the reluctance of China and other countries to make quick concessions, was the key driver of the dollar’s strength from April to August.

“And this situation can easily return,” FxPro said.

At 9.29am the all share was 0.13% up at 59,731 points and the top 40 added 0.15%. Property rose 0.33%, industrials 0.26%, platinums 0.25% and general retailers 0.19%.

Food and drug retailers dropped 0.55% and resources 0.12%.

ArcelorMittal was up 2.31% to R3.99.

Super Group rose 1.76% to R37 following the release of annual results on Monday.

Discovery rose 1.09% to R176.96 and Liberty Holdings 0.95% to R120.13.

Cashbuild lost 1.93% to R306.97. On Tuesday, it reported a 9% drop in full-year net profit to R425.25m.

Shoprite was down 1.33% to R220.62 but Woolworths added 1.11% to R51.87.

In the property sector, Hyprop gained 1.16% to R103.49 and Nepi Rockcastle 1.37% to R133.60.

Naspers edged up 0.15% to R3,575.21.

Source: businesslive.co.za