MARKET WRAP: JSE ends Thursday flat as retailers’ losses offset miners’ gains

Disappointing local data did not keep the JSE significantly lower on Thursday, with the local bourse flat as miners found favour from a rising oil price.

The oil price rose sharply after two oil tankers were attacked near the Persian Gulf, while a series of local and international data releases gave markets direction.

A weaker rand also benefited miners a little, with the local currency 0.11% weaker at R14.8862/$ as the JSE closed. Interest-rate sensitive stocks, including banks and retailers, were under pressure from the weaker rand and rising oil price. Both of these factors could stoke inflation, while data on the day showed local economic conditions remained subdued.

The all share was flat at 58,697.6 points while the top 40 was little changed. General retailers lost 1.98% and food and drug retailers 1.45%. The resources index firmed 1.42%.

Earlier, data showed mining output contracted 1.5% year on year in April, much worse than the 0.5% fall expected by the Bloomberg consensus. April marked the sixth consecutive month that the sector has declined in year-on-year terms, battered by industrial unrest and unreliable electricity supply.

The RMB/BER business confidence index was also subdued, although it met expectations, coming in at 28 index points for the second quarter. This is a two-year low, unchanged from the first quarter.

The data indicated that business conditions remained unsatisfactory, in particular for the manufacturing sector, Investec chief economist Annabel Bishop said in a note. It was necessary to reconsider the regulatory burdens imposed by the state, while ensuring they fulfilled their intended functions, she said.

“The deindustrialisation trend continues in SA, with unemployment rising alongside it, as industry is also seen to continue to face regulatory blockages and a high regulatory burden, with anecdotal evidence even of some inconsistent, and arbitrary application of these regulations,” Bishop said.

There were numerous international events to give the market direction, with the pound firming slightly as Boris Johnson won the first round of voting in the Conservative Party’s leadership contests. Analysts cited Johnson’s recent comments that, while he remained a eurosceptic, he was not advocating for a no-deal Brexit.

Absa fell 0.76% to R172.57.

Mr Price fell 2.14% to R202.09.

Naspers added 0.68% to R3,485. It said after markets closed on Wednesday that headline earnings per share (HEPS) from total operations, a metric that strips out nonoperational items, increased between 31% and 33% in the year to end-March. 

Diversified miner Glencore gained 0.92% to R51.33, BHP 1.49% to R364.03 and Anglo American 2.42% to R398.95. 

Shortly after the JSE closed the Dow was up 0.17% to 26,048.65, lifted by counters in the energy sector, reported Dow Jones Newswires. In Europe, the FTSE 100 was flat, while the CAC 40 had added 0.13% and the DAX 30 0.39%.

Gold was up 0.25% to $1,336.50/oz while platinum was down 0.24% to $808. Brent crude was up 3.25% to $61.72 a barrel.

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