JSE snaps losing streak as weaker rand lifts miners

The JSE closed higher on Wednesday, led by shares that benefit from a weaker rand, as investor sentiment soured on news out of China.

The main Chinese market is officially in bear-market territory, having fallen 20% off its high this year, with speculation on Wednesday that banks in that country were devaluing the yuan. This was interpreted as further sabre-rattling by Beijing regarding trade, adding an additional reason for investors to shy away from risk assets. The rand was weaker as a result, weighing on banks, and food and drug retailers.

The all share firmed 0.21% to 55,369.3 points and the top 40 0.39%. Food and drug retailers slumped 3.44%, banks 2.83%, and financials 2.17%. Resources firmed 2.83% and industrials 0.29%.

After two-days of thin trade, turnover on the JSE returned to normal, with corporate news providing significant direction to food and drug retailers and the resource index.

Christo Wiese has cut his stake in Shoprite by R3.9bn, putting that share under strain.

The resources index fared best, buoyed by a strong performance from diversified miners, who cheered a resurgent oil price. Production disruptions in Canada and signs of declining inventories in the US have helped Brent crude lift back to about the $77 a barrel level. The US is also pressuring allies to end imports from Iran.

Diversified miners received a fillip from a strong performance by BHP, which has reached an agreement with prosecutors in Brazil that provides for a two-year pause in compensation for those affected by the 2015 Samarco mining disaster. “The agreement means the FTSE 100 mining giant will escape an imminent fine and could pave the way for the restart of the Samarco iron ore mine,” said SP Angel analysts.

BHP gained 4.02% to R304.22, Anglo American 2.51% to R299.42 and Glencore 2.21% to R66.93.

Anheuser-Busch InBev lifted 2.18% to R1,350.78 and Richemont 1.45% to R117.05.

Sasol gained 1.83% to R474.

Sibanye-Stillwater slumped 6.12% to R7.82, as it continues to grapple with the death of another mineworker at its Driefontein mine.

Gold Fields gained 2.16% to R48.15 after ratings agency Moody’s earlier upgraded the gold producer to Baa3 from Ba1, raising it into investment grade.

AngloGold Ashanti rose 1.69% to R109.70, after it said earlier it had received environmental authorisation for its Ghana-based Obuasi mine.

Ansys jumped 20% to R60c, despite reporting earlier that net profit for the year to end-March had more than halved compared to the prior period.

EOH firmed 8.33% to R27.30, after the group divulged further detail on its future plan to split into two independent businesses by August 1.

Naspers gained 2.57% to R3,177.99.

Shoprite slumped 5.74% to R211.98 and Clicks 5.13% to R192.82.

Shortly after the JSE closed, the Dow was up 0.55% to 24,415.81 points, while in Europe the DAX 30 had gained 0.97%, the CAC 40 0.97%, and FTSE 100 0.94%.

At the same time, gold was flat at $1,258.45 an ounce, while platinum had lost 1.67% to $853.53. Brent crude was up 1.79% to $77.92 a barrel.