MARKET WRAP: JSE edges higher amid supportive local data

Good news finally managed to lift the JSE shortly before its close on Wednesday, with banks rebounding the most, following a choppy day of trade.

Banks, financial stocks and most retailers were weaker for much of the day, despite supportive economic data releases. Corporate news was mixed, with a release by diversified miner BHP bolstering the resources index, while a statement from Shoprite weighed on food and drug retailers.

The all share firmed 0.22% to 56,237.2 points, and the top 40 0.35%. Resources gained 0.73% and banks 0.44%. Platinums fell 1.36%, gold miners 1.35% and food and drug retailers 1.36%.

Earlier, inflation for June came in at 4.6% year-on-year, and while this was an acceleration from May’s 4.4%, it was less than the 4.8% consensus expectation. Retail sales for May were also upbeat, growing 1.9% year-on-year, compared to the consensus forecast of 0.8%.

While most analysts said this was positive, FNB senior economist Jason Muscat said the print suggested consumers were reining in spending, probably to divert cash to rising fuel costs. While a rebound was anticipated following the VAT increase, “the data is still extremely weak against the backdrop of high wage settlements and well-contained inflation, and it seems hopes of a consumption-led economic recovery are fading”.

Retailer Shoprite fell 3.73% to R212.30, after earlier reporting that turnover in its non-SA operations fell 7% in the year to end-June, largely due to hyper-inflation in Angola.

Clicks added 2.55% to R190.55.

Trading ex-dividend, TFG fell 2.32% to R160.

Diversified miner BHP gained 1.51% to R287.92, having earlier pleased the market with its operational review for the year to end-June.

Nedbank gained 1.44% to R261.14 and Absa 1.08% to R159.71.

Vodacom gained 3.61% to R129.84.

Global markets were cautious, watching US corporate earnings reports, and US Federal Reserve chairman Jerome Powell’s testimony before lawmakers.

Shortly after the JSE closed, the Dow was up 0.18% to 25,166.51 points, while in Europe the DAX 30 had gained 0.73%, the FTSE 100 0.61%, and the CAC 40 0.4%.

At the same time, platinum had fallen 0.55% to $812.33 an ounce and gold 0.1% to $1,226.40. Brent crude was 0.17% higher at $71.70 a barrel.

The top 40 Alsi futures index gained 0.14% to 50,170 points. The number of contracts traded was 19,141 from Tuesday’s 29,025.