MARKET WRAP: JSE lifts as global mood improves

The JSE closed higher on Wednesday, tracking global markets as positive Chinese data offset US-China trade war jitters and Hong Kong withdrew its controversial extradition bill.

Data showed on Wednesday that China’s Caixan services purchasing managers’ index rose to a three-month high of 52.1 points, exceeding market expectations.

The Hong Kong Hang Seng jumped as much as 4% in intraday trade following news reports that the controversial extradition bill had been formally withdrawn. The bill, which would have allowed for Hong Kong residents to be extradited to China, sparked a series of protests in the past few months.

“Violence might ease in Hong Kong, but the protests are likely to continue until we see the other four demands met: Beijing’s accepting Lam’s resignation, an inquiry into police brutality, the release for those who have been arrested and more democratic freedoms,”  senior market analyst at Oanda Edward Moya said.

“Today’s withdrawal is quite the pivot from yesterday’s comments from China’s top office that hinted they could unilaterally declare a state of an emergency,” Moya said.

Earlier, the Shanghai Composite rose 0.93%, Hong Kong’s Hang Seng 3.9% and Japan’s Nikkei 225 0.12%.

Shortly after the JSE closed, the Dow added 0.70% to 26,299.60 points. In Europe, FTSE 100 was up 0.44%,  France’s CAC 40 1.12% and Germany’s DAX 30 0.85%. 

British Prime Minister Boris Johnson was outvoted in parliament on Tuesday night in a bid by MPs to avoid a no-deal Brexit. In response, Johnson said he would push for an early general election.

The rand broke below R15/$ on Wednesday, its best level since August 7, as markets reacted to better-than-expected second quarter GDP released on Tuesday. SA’s economy grew 3.1% in the second quarter from a revised contraction of 3.1% in the first quarter.

At 5.20pm, the rand had firmed 1.8% to $14.8230/$, 1.34% to R16.3454/€ and 0.99% to R18.0664/£. The euro had firmed 0.49% to $1.1028. 

Gold was down 0.19% to $1,544.55/oz while platinum was up 1.87% to $980.31. Brent crude climbed 3.88% to $60.50 a barrel.

The JSE all share rose 0.3% to 54,907.20 points and the top 40 lifted 0.32%. Industrials gained 1.15% while gold miners dropped 5.09%.