MARKET WRAP: JSE and rand gain on generally positive global momentum

The JSE closed at its highest level in five months on Wednesday, as investors await the outcome of impeachment proceedings against US President Donald Trump, while the first phase of his trade deal with China has kept global markets fairly buoyant.

US stocks remain near record highs albeit in lacklustre trade as investors brace for a six-hour debate and House vote on Capitol Hill over President Trump’s impeachment, said Oanda senior market analyst Edward Moya.

Moya said Trump is widely expected to become the third US president to face impeachment but “will likely be acquitted next month by the Republican-led Senate. Republicans are certain to stay loyal to Trump and the impeachment process is not expected to yield any major market reactions.”

European markets were mixed on Wednesday evening, while the pound weakened as investors remain sceptical over newly re-elected Prime Minister Boris Johnson’s commitment to block an extension of EU trade talks beyond 2020, reviving investor fears of a no-deal Brexit.

By the JSE’s close on Wednesday, the Dow was up 0.18% at 28,306.74 points, while in Europe, the UK’s FTSE 100 had gained 0.31%. Germany’s DAX 30 was 0.42% lower and France’s CAC 40 was flat.

The JSE all share gained 0.77% to 57,767.8 points, its best level since July 23, and the top 40 0.92%. Banks added 1.78%, financials 1.44%, industrials 1.33% and the platinum index 1.06%.

Gains on the local bourse were led by Sasol, which leapt 6.35% to R324.97, adding to its 11.69% rise on Tuesday, after it reported improved production levels at its Lake Charles chemicals project in the US.

Absa led gains among the big-four banks, up 2.76% to R153.60, with Standard Bank adding 1.7% to R172.74, FirstRand 1.68% to R65.48 and Nedbank 1.5% to R221.

Discovery leapt 3.45% to R124.80, Old Mutual 3.05% to R20.26 and Sanlam 3% to R81.70.

Diversified miners pulled back a little after good recent runs, with Anglo American falling 1.74% to R406 and BHP 1.44% to R335.12.

Gold was flat at $1,1,475.27/oz while platinum gained 0.65% to $932.32/oz. Brent crude added 0.46% to $66.14 a barrel.

The rand continued its upward momentum against major global currencies late on Wednesday following a breakthrough in the 18-month-long US-China trade war.

At 7pm, the rand had gained 0.58% to R14.3002/$, 0.92% to R15.8925/€ and 0.97% to R18.6997/£. The euro was 0.33% lower to the dollar to $1.1113.

Local bonds were marginally weaker, with the R2030 last bid at 9.1% from 9.09% previously. Bond yields move inversely to their prices.

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