JSE pushes higher in choppy trade, benefiting from banks stocks

The JSE pushed higher on Thursday as global markets struggled to digest conflicting signals of out of the White House over trade with China.

A seemingly softer tone struck by US President Donald Trump on China was offset by hawkish commentary by some White House officials on Wednesday, with the rand weakening to a fraction better than R14 to the dollar as a result, before recovering slightly.

Volumes were thin at R16bn compared to the daily average of R24bn.

Banks and industrials were the best-performing indices on the day, despite earlier signs that producer inflation was accelerating slightly faster than expected, to 4.6% in May from 4.4% in April, while economists had expected 4.5%.

This was in line with the Reserve Bank’s target of 3%-6%, and the Bank would be reluctant to raise interest rates, given the weak economy, said Nedbank analysts. It may, however, be forced to do so if the rand did not appreciate over the next few weeks.

The rand was given a boost on Thursday, after the dollar came under pressure from a downward revision of first-quarter US economic growth, to 2% from 2.2%.

This helped the local currency pull back from the psychologically important R14/$ level.

The oil price, however, pushed past $78 a barrel amid signs of declining inventories in the US, imminent sanctions against Iran and possible disruptions to exports in Libya.

The all share firmed 0.77% to 55,795.2 points and the top 40 rose 0.91%. Banks gained 1.3%, industrials 1.03% and financials 0.69%. Gold miners fell 0.86%.

Diversified miner Glencore fell 2.42% to R65.31.

Sasol rose 2.43% to R485.50.

British American Tobacco surged 4.98% to R703.86, while Richemont fell 1.95% to R114.77.

Sephaku Holdings slumped 10.11% to R2.40 after earlier reporting a 35% drop in net profit to R44m for the year to end-March.

Sibanye-Stillwater gained 2.3% to R8, after the UK’s Competition and Markets Authority earlier unconditionally cleared its proposed takeover of Lonmin. However, the miner also faced news that a class-action lawsuit had been filed in the US on behalf of shareholders, owing to a falling share price as a result of a number of mine worker deaths at its operations.

Lonmin fell 3.23% to R7.20.

Shortly after the JSE closed, the Dow was flat at 24,122.37 points, while in Europe, the DAX 30 had lost 1.77%, the CAC 40 1.34% and the FTSE 100 0.3%.

At the same time, gold was off 0.15% to $1,250.09 an ounce and platinum 1.33% to $846.82. Brent crude was 1.13% up to $78.21 a barrel.