JSE pushes to four-week high as risk abates

The JSE took its cue from positive global markets on Tuesday, with only gold miners lower on the day, as risk abated and the rand firmed.

A retreating dollar helped provide support for most stocks, although a sharp rise in the oil price capped gains in interest-rate-sensitive shares, such as banks and retailers. The bank index also felt pressure resulting from a fall by Nedbank, whose interim results appeared to disappoint the market.

The all share gained 1.49% to 57,705.6 points and the top 40 rose 1.56%. Resources gained 1.88%, industrials 1.76% and food and drug retailers 1.65%.

Gold miners fell 0.65%.

A strong performance in Asian markets earlier provided support for Naspers, which gained 2.43% to R3,328.97. Tencent, in which Naspers owns just under a third, was up 1.13% on the Hang Seng. A 2.7% gain by the Shanghai Composite was attributed to recent stabilisation of the Chinese yuan, and investor focus on strong US corporate earnings reports.

Locally, data was downbeat, with manufacturing production rising a far less than expected 0.7% year-on-year in June 2018 compared with a year ago. This was well below Bloomberg’s consensus of 2.2%.

Diversified miner Anglo American gained 3.13% to R300.20, and BHP 2.22% to R299.44.

Glencore added 2.99% to R56.13, ahead of its results to end-June on Wednesday.

Recent economic data releases suggest that economic activity remained generally weak in the second quarter, and the chances of a technical recession, or two consecutive quarters of GDP contraction, were relatively high, said Nedbank Group Economic Unit analysts.

Nedbank lost 1.61% to R260.14, despite earlier reporting a 27% increase in headline earnings in the six-months to end-June. The bank also raised its interim dividend by 14%, to R6.95 per share.

Impala Platinum lost 1.11% to R18.65, amid reports that its workforce was considering going on strike in the wake of plans to cut 13,000 jobs over the next two years.

MTN gained 3.27% to R114.11, ahead of its interim results to end-June on Wednesday. In the prior period it reported headline earnings per share of R2.17, and a dividend of R2.50.

Shortly after the JSE closed the Dow was up 0.67% to 25,673.01 points, while in Europe, the FTSE 100 had gained 1.03%, the CAC 40 1.02% and the DAX 30 0.65%.

At the same time, platinum had firmed 0.71% to $828.95 an ounce and gold 0.34% to $1,211.38. Brent crude was up 0.81% to $74.24 a barrel.