MARKET WRAP: JSE bounces back on trade-war optimism

The JSE closed higher for the first time this week on Thursday, as most global equities rose after comments from the US and China bolstered hopes of the two superpowers reaching a truce on trade.

Reuters reported on Thursday that China said it is communicating with the US and is preparing to make progress as the pair are set to resume negotiations in October.

The latest comments from China come just a day after US President Donald Trump said that officials from the two countries have had goods talks and the countries could reach a trade deal soon.

Shortly after the JSE closed, the Dow was down 0.42% to 26,856.35 points. In Europe, the FTSE 100 had added 1.11%, France’s CAC 40 0.75%. and Germany’s DAX 0.55%.

Earlier, the Shanghai Composite fell 0.89% while Hong Kong’s Hang Seng gained 0.37% and Japan’s Nikkei 225 0.13%.

Locally, producer price inflation (PPI) decelerated to 4.5% in August from 4.9% in July, data from Statistics SA showed on Thursday. The consensus was for PPI to have fallen to 4.6%, according to a Bloomberg poll.

“Generally, inflationary pressures remain well contained amid subdued domestic demand, with consumer price index inflation expected to remain close to the midpoint of the target band [4.5% year-on-year] in the near term,” said Investec economist Lara Hodes.

At 5.20pm, the rand had weakened 0.14% to R15.0126/$ and 0.19% to R18.5503/£, while it was flat at R16.4117/€. The euro was little changed at $1.0934.

The benchmark R186 government bond was stronger, with the yield falling 3.5 basis points to 8.31%. Bond prices move inversely to bond yields.

Gold was up 0.31% to $1,508.40/oz and platinum 0.6% to $933.19. Brent crude lost 1.35% to $61.56 as barrel.

The JSE all share rose 0.72% to 55,271.40 points and the top 40 0.77%. Banks climbed 2.34%, financials 1.8% and general retailers 2.39%. Gold miners fell 0.73%.

Standard Bank gained 2.79% to R180.91, FirstRand 2.73% to R64, Absa 2.22% to R160.50, and Nedbank 1.92% to R232.37. 

On Thursday, the labour court ruled that the strike planned by the SA Society of Bank Officials (Sasbo) for Friday September 27 is illegal. The organisation and its members had planned to down tools over job losses in the banking industry.

Blue Label Telecoms plummeted 12.13% to R2.97, its biggest one-day loss in more than 10 weeks, after it said on Thursday that it swung into a headline loss per share of of 312.49c in the year to end-May, from headline earnings per share (HEPS) of 130.44c previously. The company said trading losses and debt issues at Cell C pushed it into a R6.6bn loss.

Capitec rose 0.44% to R1,281.29. The bank said on Thursday that its HEPS increased 20% to 2,545c in the six months to end-August.

Investec Australia Property Fund said earlier that it is seeking to raise about R849m through the issue of 55-million new shares. The company said trading in its shares has been suspended until Friday. 

Truworths gained 2.54% to R55. The retailer said on Thursday that it has struck a R600m deal with Standard Bank to refinance its UK footwear retailer, Office.

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