MARKET WRAP: JSE slightly higher with rand hedges mixed, while platinums shine

The JSE all share closed marginally higher on Tuesday following a relatively muted reaction to another round of tariffs implemented by US President Donald Trump against China.

Analysts said most of the expected short-term adverse consequences have already been priced in. About $200bn of imports will be affected initially. However, China has threatened to retaliate, which might imply another round of higher tariffs from the US. This could lead to a further escalation of global trade tension, affecting worldwide GDP growth.

The new tariffs, due to come into effect on September 24, will start at 10%, before being increased to 25% at the beginning of 2019.

“If China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267bn of additional imports,” a statement from Trump warned.

Rand hedges were mixed, with Naspers closing 0.83% lower at R3,179.88 and British American Tobacco down 2.37% to R699.76. Naspers announced plans on Monday to separately list its entertainment and internet subsidiary MultiChoice.

Miners were buoyed by a weaker dollar and higher oil prices. Shortly after the JSE’s close, Brent crude had risen 1.14% to $78.8 a barrel. Platinum stocks received a fillip from a jump in the metal price to $815.10 an ounce, a 2.5% gain.

The all share closed 0.15% higher at 56,381.30 points and the top 40 added 0.05%. Platinums rose 3.35%, the gold index 1.53%, banks 1.1%, financials 0.69% and property 0.47%. Industrials shed 0.2%.

AB InBev was up 0.44% to R1,339.96.

Impala Platinum rose 4.27% to R19.05.

Standard Bank added 1.52% to R174.61.

The rand firmed on a weaker dollar, reaching a day’s best of R14.8119 as the euro crossed the $1.17 level for the first time in just more than three weeks.

The local currency also found some support on a possible interest-rate hike of 25 basis points by the Reserve Bank’s monetary policy committee (MPC) on Thursday. August’s consumer price inflation data, due on Wednesday, will be a crucial factor in the decision. Any rise closer to the upper end of the Reserve Bank’s 3% to 6% target may increase the likelihood of a hike. The market consensus is for the monthly consumer price index (CPI) to come in at 5.2% from 5.1%, previously.

Local bonds showed little reaction to the firmer rand with the R186 last bid at 9.26% from 9.25%. The US 10-year treasury was at 3.0267% from 2.9898%.

The top 40 Alsi futures index gained 0.04% to 50,050 points. The number of contracts traded was 123,440.