MARKET WRAP: JSE edges higher as global risk appetite improves

The JSE pushed higher on Tuesday, tracking buoyant global markets, although a stronger dollar served as a headwind for precious-metals miners.

The all share firmed 0.4% to 52,165.5 points and the top 40 0.52%. Gold miners lost 4.1%, platinums 1.33% and food and drug retailers 0.65%. Industrials gained 0.62% and resources 0.66%.

The greenback was bolstered by ongoing trade talks between the US and China, with upbeat comments from officials on both sides providing some optimism for traders. A firmer dollar can make commodities more expensive for those holding other currencies.

“It’s too early to claim that the worst is behind us but the environment currently looks more favourable than it has for a few months,” said Oanda analyst Craig Erlam. US President Donald Trump, however, remained unpredictable and other risk factors, such as Brexit, persisted, Erlam said.

The rand earlier breached R14 to the dollar, but had recovered slightly by the JSE’s close. At 5pm it was 0.17% weaker at R13.91/$.

The stabilising dollar put pressure on emerging-market currencies, including the rand, said FXTM chief market strategist Hussein Sayed. Banks and retailers generally benefit from a stronger rand.

A rising oil price provided some support for diversified miners, with BHP rising 1.5% to R301.45 and Glencore 1.74% to R51.60.

Local factors are in the backseat this week, although the South African Chamber of Commerce and Industry business confidence index for November is due on Thursday. Manufacturing data for November is due on the same day.

Also on trader’s radars is Brexit. Reports on Tuesday suggested that British officials were exploring an extension of the Brexit deadline beyond March 29, although this was met by denials from UK Brexit secretary Stephen Barclay.

British American Tobacco gained 1.8% to R446.89, recovering slightly from Monday’s 5.33% slump. US stockbroking firm Cowen on Monday downgraded a number of cigarette manufacturers’ sales outlook. The report also warned about the potential for US regulators to impose further restrictions on smoking.

AB InBev gained 3.25% to R984.41 and Richemont 2.63% to R92.32.

AngloGold Ashanti slumped 5.29% to R171.42, Harmony 4.21% to R25.92 and Gold Fields 3.3% to R48.98.

Hammerson rose 3.69% to R60.35, Intu 3.11% to R19.88 and Capital & Counties 3.26% to R43.41.

Naspers rose 0.48% to R2,835.49.

Shortly after the JSE closed the Dow was up 1.33% at 23,842.87 points, while in Europe, the FTSE 100 had gained 1.17%, the CAC 40 1.84% and the DAX 30 1.44%.

At the same time, gold had fallen 0.22% to $1,285.97 an ounce and platinum 0.15% to $822.52. Brent crude had risen 1.58% to $58.50 a barrel.

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