MARKET WRAP: JSE surges 3% led by Sasol and Naspers

The JSE started off the last month of 2018 on a positive note, jumping more almost 3% in broad-based gains, as markets cheered easing US-China trade tension.

Risk assets generally were boosted by news of a 90-day truce between the world’s two-largest economies, with commodities also surging.

The all share added 2.79% to 52,079.2 points and the top 40 rose 3.12%. Industrials added 2.62%, platinums 4.01% and resources 4.89%.

Brent crude climbed 4.27% to $61.62 a barrel shortly after the JSE closed. The price of oil was lifted by both improved prospects for global trade, and ahead of a meeting of oil cartel Opec this week, which is widely expected to result in an agreement for hefty production cuts. At the same time gold was up 0.94% to $1,233.61 an ounce while platinum fell 0.12% to $804.51.

Sasol was a major beneficiary of this, rising 6.82% to R434. Diversified miners were also lifted with BHP rising 5.64% to R278.51. Anglo American rose 5.32% to R291.72 and Glencore 3.3% to R52.87.

Earlier, local data was somewhat positive. The Absa purchasing managers index climbed to 49.5 index points in November from October’s depressed reading of 42.5 points.

The surprisingly strong result will add to the improving sentiment towards SA’s economy, although many analysts remain overly optimistic in terms of SA’s economic performance in the third and fourth quarters, said Capital Economics senior emerging markets economist John Ashbourne.

Data on Tuesday will indicate whether SA exited its technical recession in the third quarter. The Bloomberg consensus is that SA’s economy grew 0.5% year on year in the third quarter.

Naspers surged 4.54% to R2,888.51, tracking gains in Hong Kong listed associate Tencent. On Friday Naspers had reported 22% growth in its group trading profit for the six months to end-September. The market heavyweight also indicated it was gearing up to announce a series of acquisitions in coming months, to take advantage of a healthy cash pile and depressed asset prices.

Rebosis Property Fund added 1.99% to R3.07 having earlier pleased the market with an announcement it would sell several properties in Gauteng for up to R2.2bn.

Shortly after the JSE closed the Dow was up 1.11% to 25,821.18 points, while in Europe, the FTSE 100 had lifted 1.47%, the CAC 40 1.14% and the DAX 30 2.02%.

Rand hedge Richemont gained 3.56% to R92.30 while AB InBev fell 2.6% to R1,040.55.

Anglo American Platinum rose 5.34% to R468.76 and Northam 4.29% to R42.07.

FirstRand gained 2.86% to R68.71, Standard Bank 2.51% to R179.59 and Absa 2.24% to R157.45.

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