MARKET WRAP: JSE bucks lower trend in Europe

The JSE ended firmer on Tuesday, outperforming its peers in Europe where the spectre of recession loomed large.

The all share index gained 0.83% to end the session at 69,772.27 points,  powered mostly by resources shares, which were driven by higher metal prices. The gauge of big resource stocks surged almost 3%, the most in five days. 

Gold counters also had a positive session on account of a higher gold price, which rose 0.87% to $1,750.13/oz.

Brent crude was the standout performer among commodities after top oil producer Saudi Arabia said Opec+ could cut output to support prices in the case of returning Iranian crude and with the prospect of a drop in US inventories. At 7.10pm Brent was trading at 3.24% higher at $99.82 a barrel.

The spot price of platinum recovered 0.7% to $883.60/oz, ending a four-session losing streak. But palladium bucked the trend, falling 0.88% to $1,981/oz.

Banks were patchy, but insurance stocks ended higher for a second day, lifted in part by a trading update from Momentum Metropolitan. As is the case with its peers, Momentum is benefiting from the fall-off in Covid-19-related deaths and other claims. The group said normalised headline earnings per share are expected to surge by between 320% and 340% year on year in the 12 months ended June.

In the currency market, the rand oscillated around R17/$, but weakened slightly against the euro and pound. At 6.39pm SA’s currency was 0.19% stronger at R16.9613/$, little changed at R16.92091/€ and 0.6% weaker against the pound at R20.1015/£.

Europe’s main markets were all lower, with the UK’s FTSE 100 losing 0.61%, and Germany’s DAX down 0.27% after a similarly downbeat session in Asia.

“It’s clear that investors already have an eye on the Jackson Hole Symposium later in the week and we’re perhaps seeing some apprehension and anxiety ahead of that. I’m not entirely sure where that has come from because they’ve been perfectly happy to bat away hawkish warnings in recent weeks and if anything, the data has turned slightly in their favour,” Oando senior market analyst Craig Erlam said in a note.

“It may simply be a case of profit-taking after a good run in case the message finally gets through and causes a wobble in the markets. Equally, we could just be seeing markets being set up for a strong end to the week if [Fed] chair [Jerome] Powell says anything remotely dovish that excites traders once more.”

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