MARKET WRAP: JSE flat as banks offset losses by iron-ore miners

The JSE was little changed on Wednesday, as losses by mining stocks offset gains in most other indices.

There was quite a lot of news to give local stocks direction, with a number of large-cap stocks registering impressive movements.

Kumba Iron Ore led the losses, falling 4.94% to R452.46. The world’s largest producer, Vale, has been given permission by a Brazilian court to re-open an iron-ore mine that was closed following a fatal dam disaster earlier this year.

Diversified miner BHP fell 3.03% to R339.48, having said earlier it had lowered its production forecasts for iron ore, as it grapples with a hurricane that hit Western Australia in March.

The all share added 0.01% at 58,908.3 points, while the top 40 fell 0.05%. Banks gained 1.19% and industrials 0.86%. The resources index slipped 2.23%.

Earlier, sentiment was given a boost by news that the Chinese economy grew 6.4% in the three months to end-March, only slightly faster than the 6.3% expected by the market. Analysts, however, cited much better-than-expected industrial production figures as a reason to be confident that Beijing’s stimulus measures are having an effect.

Locally, inflation came in better than expected, rising only 4.5% in March year-on-year compared with the 4.6% expected by the market.

The Reserve Bank has expressed a preference for inflation expectations to be firmly anchored at the mid-point of the 3% to 6% target range and deems monetary policy to be accommodative, said Investec economist Kamilla Kaplan. “In view of this, and that inflation is set to rise back towards the upper end of the target range from 2020, the prospect for an interest rate cut is diminished.”

Retail sales beat market expectations, rising 1.1% year-on-year in February, while the market had expected only 0.6% growth. This is encouraging, but growth remains modest and consumer confidence fragile, said Nedbank Group Economic Unit analysts.

Rand hedge AB InBev fell 1.09% to R1,243.32 and British American Tobacco 1.29% to R566.70. Richemont added 1.96% to R104.66.

Sibanye-Stillwater jumped 6.59% to R14.40. Earlier, a five-month strike at its gold operations came to an end.

Clicks shot up 3.99% to R184.07. It earlier reported that group turnover grew 6.2% in the six months to end-February. Total income rose 8.9%, while diluted headline earnings per share (HEPS) grew 13.2% to 300.1c.