MARKET WRAP: JSE in broad-based recovery amid Chinese stimulus

Signs that the governments of China and Germany are prepared to meet their respective economic slowdowns with stimulus measures helped lift the JSE on Monday, with the local bourse recovering almost 1%.

China lowered borrowing costs for businesses over the weekend, while reports on Friday suggested the German government was willing to relax its strict budget-deficit rules in response to its flagging economy.

Sentiment was further lifted by US President Donald Trump’s comments at the weekend that he was still optimistic a trade deal would ultimately be reached with China, with talks between the two countries continuing this week.

There was a chance that stimulus measures, along with a stabilisation of the US-China trade-war situation, could provide a  “springboard” for equities, but sentiment remained tenuous, said Vanguard Markets managing partner Stephen Innes in a note.

The all share added 0.95% to 54,386.3 points and the top 40 rose 1.01%. Resources added 2.11%, platinums 1.7% and food and drug retailers 1.1%.

Shortly after the JSE closed the Dow was up 0.95% at 26,132.90 points, while in Europe, the FTSE 100 had added 0.93%, the CAC 40 1.24% and the DAX 30 1.32%.

Gold was down 0.82% at $1,500.87/oz while platinum had added 0.72% to $855.99/oz. Brent crude was 0.99% higher at $59.24 a barrel.

Oil was buffeted after Yemeni separatists attacked a Saudi Arabian oil facility at the weekend, although gains were pared after a report by oil-cartel Opec pointed to modest demands for oil over the coming months.

Diversified miner Glencore gained 4.47% to R43.50, Anglo American 3.07% to R323.84 and BHP 2% to R332.17.

Rand hedge Richemont gained 2.3% to R117.90 and AB InBev 1.79% to R1,480.

Naspers added 0.86% to R3,399.

Indluplace fell 2.3% to R4.25, a record low.

Sasol gained 3.29% to R273.71. The petrochemical giant plunged 8.3% last week, amid volatility in the oil price as well as news that it had delayed its financial results in order to probe cost overruns at its Lake Charles project in the US.

City Lodge slipped 1.56% to R93.52, extending its 2.56% loss on Friday, which followed its announcement that full-year net profit fell 26% to end-June.

Steinhoff International slumped 4.81% to 99c. Bloomberg reported on Friday that former CEO Markus Jooste said the company’s $56m claim against him was “vague and embarrassing”, leading to an almost 12% fall for the embattled retailer.

Truworths was flat at R53.52, having slumped 7.48% on Friday. On Thursday, the retailer reported a 74% decrease in profits for the full year to end-June.

Blue Label Telecoms gave up 3.51% to R3.30, a record low. It said earlier it expected headline earnings for the year to end-May to fall as much as 20%.

African Rainbow Minerals was flat at R160.51. It said earlier it expected a rise in headline earnings per share for the year to end-June of between 2% and 10%.

Discovery fell 8.3% to R101.47, bringing its loss in August to 23.3%.

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