JSE starts week on a high note, as risk-taking returns to market

The JSE started the week on a positive note, climbing more than 1% to above 59,000 points at the opening on Monday morning, as the market seemed set to build further on last week’s upbeat showing.

It was the first move above 59,000 points in five months.

Miners led at the opening, with Brent crude oil holding above $75.80 a barrel.

The all share index gained 3.8% last week, its best weekly showing since February.

Sentiment was risk-on following US Federal Reserve chairperson Jerome Powell’s speech at the central bank summit in Jackson Hole, where he reaffirmed the Fed’s preference for a gradual increase in interest rates.

“No new information was provided as Powell reiterated the data dependency of the central bank, with his optimism regarding [higher] inflation intact,” said Oanda analyst Alfonso Esparza.

The market is already pricing in two US rate hikes in 2018 and the somewhat dovish remarks from Powell did not add support to the dollar. The euro firmed above $1.16, supporting a steady rand.

However, the rand was slightly weaker on Monday morning at R14.30 to the dollar from an overnight close of R14.2514.

The Dow Jones industrial average closed 0.52% higher on Friday. The Nikkei 225 rose 0.88% and the Hang Seng jumped 2.17% on Monday morning, on positive Chinese data and on the Fed’s commitment to gradually hike rates.

Tencent rose 1.75% in Hong Kong trade, but Naspers showed little initial reaction, trading flat at R3,537.27 at the JSE’s opening.

At 9.48am the all share index was up 1.13% at 59,464.6 points and the top 40 rose 1.25%. Resources rose 2.33%, banks 1.61%, the platinum index 1.29%, financial shares 1.07% and the gold index 0.89%.

Anglo American rebounded 3.43% to R297.88.

British American Tobacco added 1.71% to R733.57.

Absa rose 2.26% to R164.39 and Nedbank 1.7% to R275.

MMI Holdings recovered 1.22% to R16.59 from a weak close on Friday after informing the market that headline earnings per share (HEPS) were expected to decrease by between 15% and 25% for the year to end-June.

Among retailers Woolworths added 0.92% to R50.46 and Massmart 0.74% to R114.50. Both reported results last week.

Resilient slipped 0.63% to R57.90 and Fortress B 1.19% to R15.71.

Educational group Advtech rose 0.33% to R15.40 after reporting interim revenue to end-June rose by 13% to R2.3bn, but its net profit declined by 8% to R196m.