MARKET WRAP: JSE jumps 2% to reach two-month high

The JSE pushed higher in broad-based gains on Wednesday, closing above 53,000 points for the first time in two months, lifted by positive international and domestic news.

Clear signs the White House is seeking to strike a trade deal with China soon helped improve global sentiment, while local data was also positive.

European, Asian and US markets all pushed higher, but a sharp rise in the oil price slightly spoilt the mood for domestic equities.

Trading ex-dividend, diversified miner BHP slumped 4.13% to R289. The miner, with a market capitalisation of R101bn, makes up about 11% of the top 40.

The all share gained 2.03% to 53,222.9 points and the top 40 2.22%. Industrials added 2.51%, gold miners 2.96%, resources 1.9%, banks 1.22% and financials 1.25%.

Earlier, the Absa purchasing managers index (PMI), which gauges activity in the manufacturing industry, rose from 49.5 points in November to 50.7 in December.

Looking ahead, a meaningful and sustained rebound in manufacturing sector activity is likely to be curtailed by slowing global trade momentum, said Investec economist Kamilla Kaplan. Locally, load-shedding poses a risk as well.

Forthcoming event risks include the release of the US Federal Reserve minutes from its December meeting, due at 9pm local time. The minutes will be of particular interest after Fed chair Jerome Powell, earlier this month, delivered what is widely considered dovish commentary, suggesting the world’s most influential central bank may hold off on planned interest-rate increases, despite bullish economic data.

“At the December meeting, the committee reduced its forecasts for rate hikes this year from three to two but some were expecting it to go further,” said Oanda analyst Craig Erlam.  “Powell’s recent comments would suggest it won’t take much [to reduce its forecasts].”

Thursday sees the release of the South African Chamber of Commerce and Industry’s (Sacci) business confidence index for December, as well as manufacturing data for November.

Naspers leapt 4.85% to R2,973.01 and Tiso Blackstar, which publishes Business Day, 5.88% to R3.50.

Diversified miner Glencore added 2.15% to R52.71 and Anglo American 2.55% to R321.35. Sasol gained 3.31% to R445.

Kumba Iron Ore rose 4.05% to R279.99 and Exxaro 4.41% to R138.87.

Rand hedge Richemont gained 1.67% to R93.86.

Shortly after the JSE closed, gold was up 0.31% to $1,289.39/oz  and platinum 0.23% to $824.03. Brent crude had jumped 2.83% to $60.43 a barrel.

The Dow was up 0.67% to 23,950.08 points, while in Europe the CAC 40 had gained 1.33%, the DAX 30 1.16%, and the FTSE 100 0.9%.

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