MARKET WRAP: JSE rebounds on news of US-China trade talks

The JSE closed higher on Thursday, tracking positive global markets, with Naspers recovering some of the losses it sustained on Wednesday.

The rand was stable, but global markets and many emerging-market currencies pushed higher on news that the US and China are set to resume trade talks next month. A $15bn pledge from Qatar to Turkey also helped stabilise the latter’s currency, which has recently been battered by the implementation of US sanctions, and domestic concerns around inflation.

The all share rose 1.65% to 56,562.3 points, and the top 40 1.8%. Banks gained 2.15%, platinums 2.64%, and food and drug retailers 1.16%. Gold miners slipped 0.48%.

The local bourse extended gains as US markets opened, with the Dow up strongly on improved global sentiment.

Market heavyweight Naspers was up 2.79% to R3,146.14, despite Hong Kong-listed Tencent earlier extending Wednesday’s losses. Tencent fell sharply on Wednesday after releasing disappointing second-quarter results. Naspers owns a sizeable chunk of Tencent, which has come under sustained pressure so far in 2018, with its share price having lost about 21%.

Some believe this is not as bad as has been made out, said Vestact’s Byron Lotter. “Of course, it is pretty heavy, but to put it into perspective, a few weeks ago, Facebook — which has a similar market cap — fell 18% in one day.”

Local data was again downbeat, with building plan approvals and completed projects contracting in June, following a moderate uptick in May. The real value of building plans approved fell by 5.2% year on year in June, with lacklustre economic growth and persistent policy uncertainty weighing on investor confidence, said Investec economist Lara Hodes. A modest uptick in activity it still expected.

Diversified miner Glencore rose 2.67% to R56.85 and Anglo American 2.11% to R286.39.

Standard Bank gained 1.59% to R187.18, after earlier saying its overall headline earnings grew 4.6% to R12.7bn in the six months to end-June.

Tiger Brands slumped 8.94% to R298.33, after saying earlier it expected to report, on November 22, that its headline earnings per share (HEPS) for the year to end-September declined by between 22% and 37%.

At 5.40pm, the Dow was up 1.39% at 25,511.8 points, while in Europe the FTSE 100 had gained 0.86%, the CAC 40 0.83%, and the DAX 30 0.65%.

At the same time, platinum was up 2.81% to $790.52 an ounce, and gold 0.47% to $1,179.93. Brent crude was up 0.58% at $71.15 a barrel.

The top 40 Alsi futures index gained 1.73% to 50,479 points. The number of contracts traded was 25,488 from Wednesday’s 36,267.