JSE pushes higher as markets cheer Chinese stimulus

Positive local and international news helped the JSE push higher on Tuesday, with the bourse recording broad-based gains.

The rand was firmer, but miners pushed higher regardless, as investors revised their demand for commodities upwards.

The all share gained 0.88% to 57,054.8 points and the top 40 rose 1.01%. Platinums leapt 4.84% and resources 2.64%, with general retailers adding 0.94%.

Global markets were positive, after Chinese officials unveiled massive infrastructure spending and stimulus plans earlier, widely seen as a means to combatting increasing restrictions by the US on trade.

The announcement follows a $74bn central bank injection into the banking system on Monday, and, according to local media, incentives for banks to buy low-rated corporate bonds, reported Dow Jones Newswires.

The current policy environment for China was challenging, but Beijing had more policy tools at its disposal, and authorities had become more co-ordinated in their approach to fiscal, monetary and foreign-exchange policies, BlackRock’s global chief investment strategist Richard Turnill said.

Local sentiment was also given a boost by news that China had pledged $14.7bn in investment into SA.

Domestic data, however, was less positive, with SA’s coincident business cycle indicator for April — the first month of the second quarter — falling to 101.9 index points from 103 in May.

The rand also brushed off a surprise move by the Turkish central bank to keep interest rates on hold, with central bank-related fears in that country recently proving contagious to other emerging-market currencies.

The local currency also appeared to be benefiting from President Cyril Ramaphosa’s ongoing investor road show, having recently received multiple pledges for foreign direct investment, said Herenya Capital Advisors founder Petri Redelinghuys.

Diversified miner Glencore gained 4.46% to R57,40, Anglo American 4.33% to R295.10 and BHP 3.92% to R297.02.

Kumba Iron Ore firmed 2.9% to R299, after earlier declaring a dividend of R14.51 per share for the six months to end-June, something that includes a once-off top-up over and above its new policy of returning between 50% and 75% of headline earnings to investors.

Anglo American Platinum jumped 7.11% to R385.60, extending marginal gains made on Monday when the miner reported a 74% rise in gross profit on metal sales for the six months to end-June.

Vodacom fell 2.6% to R125.51, despite earlier saying that group service revenue grew 5.2% in the quarter to end-June.

Shortly after the JSE closed the Dow was up 0.87% to 25,260.55 points, while in Europe, the DAX 30 had gained 1.38%, the CAC 40 1.27% and the FTSE 100 1.07%.

At the same time, platinum had risen 1.05% to $840.15 an ounce, and gold 0.29% to $1,228.01. Brent crude was 1.17% higher at $73.75 a barrel.