MARKET WRAP: Drop to lockdown level 1 gives leisure stocks a boost

President Cyril Ramaphosa’s easing of lockdown restrictions on Thursday evening provided a fillip to leisure stocks on the JSE on Friday, while the overall market was weaker as inflation fears continued to weigh on global market sentiment.

While assurances from the world’s leading central banks that accelerating inflation brought on by supply-chain disruptions would prove to be temporary, investors aren’t convinced.

City Lodge led the gains in its sector, rising the most in more than two months, up 6.35% to R4.19. Sun International added 5.19% to R20.67, Tsogo Sun Hotels 4.92% to R3.20 and Tsogo Sun Gaming 4.9% to R10.70.

Under adjusted level 1, the curfew will begin at midnight and end at 4am. Curbs on alcohol sales have been scrapped apart from a prohibition on sales after 11pm.

The all share fell 0.97% to 63,661 points — its biggest drop in 10 days, while the top 40 was down 1.03%. Retailers lost 2.3%, industrial metals 1.58%, resources 1.5% and listed property 1.25%.

Global markets have been under pressure in the month of September, falling again on Friday as China’s power crisis forced officials to order supplies to be secured at “any cost”, saying blackouts will not be tolerated.

“It’s not just in China. The global energy crunch is set to push up prices for fuel and household heating around the world,” said Oanda senior market analyst Craig Erlam.

“Supply chain issues have widely been weighing on businesses, but an energy spike could prove to be very disruptive to the short-term outlook,” he said.

“A combination of slowing growth, less accommodative monetary policy, China headwinds, fading fiscal stimulus, and nagging supply chain bottlenecks all conspired to weigh on investor sentiment as we head into the fourth quarter of 2021,” said Erlam.

In Europe, the FTSE 100 fell 0.84% and Germany’s DAX 30 0.68%, while France’s CAC 40 was flat.

Earlier, Japan’s Nikkei relinquished 2.31%, while the Shanghai Composite and Hong Kong’s Hang Seng were closed.  

The rand firmed along with its emerging-markets peers. At 7pm, it had strengthened 1.4% to R14.8569/$, 1.29% to R17.2306/€ and 0.78% to R20.1476/£. The euro was 0.14% firmer at $1.1596.

Gold gained 0.17% to $1,758.48/oz and platinum 1.63% to $976.73. Brent crude was 0.55% firmer to $78.76 a barrel.

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