MARKET WRAP: JSE closes higher as China’s moves boost sentiment

The JSE closed higher on Tuesday as the market focused on a number of steps taken by Chinese authorities to boost investor confidence.

Platinums and resources led at the close, with banks, financials and retailers also performing well on the day. Resources cashed in on a firmer Brent crude price, while the gold index closed lower. Trade was thin, with volumes at R14bn.

The Dow was up 0.8% at the JSE’s close, while the FTSE 100 had risen 1% and the DAX 30 1.5%.

China pledged earlier to invest $14.7bn in SA and grant loans to cash-strapped Eskom. This followed a meeting between President Cyril Ramaphosa and his Chinese counterpart, President Xi Jinping, in Pretoria on Tuesday. Xi is on an official state visit to SA ahead of the 10th summit of the Brazil, Russia, India, China and SA (Brics) nations later in the week.

Meanwhile, China’s state council outlined measures aimed at bolstering domestic consumption, such as corporate tax cuts and support for small businesses.

Surging government bond yields in the US and Japan, supported by [Federal Reserve] monetary policy tightening and Bank of Japan (BOJ) tweaking its easing policies, boosted banks and financials, Dow Jones Newswires reported.

A weakening yuan jolted markets earlier. BlackRock analysts expect China to rely mostly on fiscal and monetary tools, rather than the currency, to manage any growth slowdown in the second half of the year.

The euro rebounded on upbeat economic data released in the eurozone, hitting a day’s best of $1.1717 from $1.1692. This boosted the rand, as the local currency shrugged off a 3% drop in the Turkish lira after authorities there kept interest rates unchanged. The market expected at least a one percentage point rise, a few weeks after President Recep Tayyip Erdogan appointed his son-in-law as finance minister.

The all share closed 0.88% up at 57,054.80 points and the top 40 gained 1.01%. The platinum index jumped 4.84% and resources 2.64%. General retailers rose 0.94%. Banks and financials both ended the day up 0.91%, while the gold index shed 0.75%.

Anglo American rose 4.33% to R295.10. Anglo American Platinum leapt 7.11% to R385.60.

Steinhoff tumbled 22.38% to R2.15.

Naspers rose 0.86% to R3,419.90.

The rand was at R13.3222 to the dollar from R13.4595. The R186 yield was steady at 8.71%.

The top 40 Alsi futures index gained 1.23% to 51,042 points. The number of contracts traded was 18,531 from Monday’s 16,408.