MARKET WRAP: JSE recovers a little in line with world markets

The JSE all share pushed higher on Wednesday, bolstered by a sightly firmer rand, as some risk-on trade returned to the market.

Global stocks were recovering from sharp sell-offs, driven by the technology sector. On Wednesday, the Dow and tech-heavy Nasdaq opened higher, with the latter up 1% as the JSE closed.

The all share gained 0.49% to 51,318.7 points and the top 40 0.64%. General retailers gained 3.02% and industrials 1.45%.

The tech-stock sell-off hit Naspers hard, with the share slumping 7% on Tuesday. It recovered 3.77%, however, on Wednesday, to R2,716.

Local news was mildly positive, with inflation for October largely in line with expectations.

The outcome has added to hopes the Reserve Bank will keep interest rates on hold on Thursday, something that could be beneficial for banks and retailers. Moderating inflation, a stable rand and falling oil price have boosted that expectation.

Recent comments by SA Reserve Bank governor Lesetja Kganyago, however, have pointed to a desire to keep inflation close to the mid-point of the Bank’s target band, of 3% to 6%, said PPS Investments analyst Luigi Marinus. This could pressure the Bank to raise interest rates, although many would hope that recent disappointing retail sales, and low levels of economic growth, would also be considered.

On Wednesday, the retailers index was given a fillip by Pepkor and Lewis, with the latter shooting up 9.72% to R30.94. It earlier reported that merchandise sales grew 25.9% in the six months to end-September, with the group upping its dividend 5% to 105c per share.

Pepkor jumped 7.95% to R18.60, rebounding from its 6.4% slump on Tuesday, when it warned that headline earnings per share (HEPS) for the year to end-September would decline by up to 42%.

Sasol fell 1.4% to R431.50, despite the petrochemical company saying earlier that HEPS were expected to increase by between 12% and 29% in the six months to end-December.

Rand hedge AB InBev fell 2.47% to R1,060.

British American Tobacco lost 1.79% to R484.10. The share dropped 22.29% last week, as the market braced for the possibility that US regulators would restrict sales of menthol cigarettes.

Taste Holdings rose 4.55% to 23c, after saying earlier it expected its headline loss per share for the six months to end-August to decrease by between 48% and 52%, largely due to a share issuance.

Shortly after the JSE closed the Dow was up 0.54% to 24,598.44 points, while in Europe, the FTSE 100 had gained 1.04%, the CAC 40 0.45% and the DAX 30 0.95%.

At the same time, gold was up 0.41% to $1,226.37 an ounce and platinum 0.98% to $848.29. Brent crude had gained 1.53% to $63.31 a barrel.

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