MARKET WRAP: JSE gains as markets eye US-China trade deal developments

The JSE closed higher for a sixth consecutive trading session on Wednesday, while global markets were mixed as investors await more developments in the US-China trade war.

Traders remained in wait-and-see mode on Wednesday as the US and China are expected to sign a partial deal in the coming weeks. Markets were boosted earlier this week following reports that China is pressuring the US to drop some of the tariffs imposed on its imports. 

 “We are still seeing plenty of trade-war headlines with China, it seems, looking to capitalise on [US President Donald] Trump’s desire to secure a phase one agreement by demanding the removal of more tariffs,” Oanda senior market analyst Craig Erlam said. “The question is whether these late requests could derail the deal so late in the day.”

Shortly after the JSE closed, the Dow was marginally higher at 27,498.50 points, boosted by an upbeat earnings season. In Europe, the FTSE 100 was little changed, while France’s CAC 40 added 0.35% and Germany’s DAX 30 0.22%.

Earlier, the Shanghai Composite fell 0.43% while Hong Kong’s Hang Seng was flat and Japan’s Nikkei 225 rose 0.22%.

The rand broke a three-day winning streak on Wednesday, and was the third worst performer among emerging-market currencies on the day. At 5.24pm, the rand had weakened 0.51% to R14.8286/$, 0.6% to R16.4348/€, and 0.5% to R19.1001/£. The euro was flat at $1.1084.

Gold was up 0.24% to $1,486.93/oz while platinum was flat at $926.69. Brent crude fell 1.37% to $62.17 a  barrel.

The R2030 government bond was weaker, with the yield rising 2.5 basis points to 9.11%. Bond yields move inversely to their prices.

Markets are still awaiting the announcement of a new CEO for Eskom this week. Rand Merchant Bank fixed-income specialist Michelle Wohlberg said: “If it is a credible candidate, we could see SA government bonds strengthen.”  

The JSE all share rose 0.71% to 57,652.6 points and the top 40 0.84%. Platinum miners gained 5.81%, banks 0.94% and resources 1.03%. 

Anglo American Platinum rose 5.77% to R1,178.09, Impala 6.62% to R108, and Northam 4.9% to R107. 

Nedbank gained 1.59% to R242.26, FirstRand 1.01% to R69.04, Absa 0.69% to R161.67, and Standard Bank 0.86% to R180.77. 

Among diversified miners, BHP rose 0.95% to R337.14 and Anglo American 0.12% to R394.99. 

South32 gained 2.65% to R27.09. The miner said on Wednesday that Seriti Resources has reached a deal to acquire South32’s coal assets.

Intu Properties plunged 20.48% to R6.25. The company said on Wednesday that it was close to selling two Spanish assets to raise equity.

Absa, which rose 0.69% to R161.67, confirmed on Wednesday that the head of its wealth investment management and insurance division, Nomkhita Nqweni, will be leaving the company. 

Statistics SA is expected to release manufacturing production for September on Thursday. The median forecast according to Bloomberg is for manufacturing activity to have contracted for a fourth month, with it predicting a fall of 0.9% from 1.9% in August.

The SA Chamber of Commerce and Industry (Sacci) is set to release the business confidence index (BCI) for October on Thursday. The BCI is expected to have fallen to 92 points from 92.4 in September, according a Bloomberg median forecast.

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