MARKET WRAP: Miners lead JSE higher as metal prices remain elevated
The JSE closed higher on Wednesday with miners leading gains, while some global equity markets remained under pressure as concerns about economic growth continue to spook investors.
Fears of a global recession escalated on Wednesday after the yield on the benchmark two-year US treasury notes rose above that of the 10-year treasury — which is interpreted as a warning that a recession is approaching. The yield on the two-year note was up six basis points, its biggest one-day gain since 2007.
“Obviously the timing of this is no coincidence, coming so shortly after the US and China decided to step it up a gear and inflict additional tariffs on one another,” said senior market analyst at Oanda, Craig Erlam.
On Wednesday, UK Prime Minister Boris Johnson requested a suspension of parliament until October 14, placing some pressure on the pound. Members of the UK parliament are expected to return to work on September 3 and will break in mid-September, only to return just 17 days before the Brexit Halloween deadline.
Soon after the JSE closed, the rand had firmed 0.24% to R18.7666/£, while it had weakened 0.23% to R15.3366/$ and 0.12% to R16.9985/€. The euro was flat at $1.1083.
While remaining around six-year highs, gold was down 0.29% to $1,538.18/oz, while platinum jumped 4.05% to $901.71, its first rise above $900 since April. Brent crude added 0.63% to $60.38 a barrel.
The Dow was 0.46% higher at 25,896.31 points. In Europe, the FTSE 100 was up 0.13%, while France’s CAC 40 was down 0.61% and Germany’s DAX 30 0.54%. Earlier, the Shanghai Composite fell 0.29% and Hong Kong’s Hang Seng 0.19%.
Locally, National Treasury’s plan to boost GDP growth, announced on Tuesday night, was seen as market boosting. Chief economist at Old Mutual Investment Group Johann Els said the plan is “generally positive and should be viewed positively by the markets. The ideas contained in the report are mostly pragmatic, given it is not too ambitious and, at the same time, not overly contentious.”
The all share gained 0.67% to 54,255.60 points and the top 40 0.58%. The gold mining index rose 2% and platinum miners leapt 4.67%.
Distell said on Wednesday that its headline earnings fell 1.7% in the year to end-June. Its share price was little changed at R130.28
Dis-Chem Pharmacies rose 0.67% to R20.89. The company said earlier that its retail revenue increased by 12% to R9bn in the five months to end-July.
Bidcorp rose 2.89% to R311. The company said on Wednesday that its annual dividend had increased 14.3% to R6.40 per share in the year to end-June.
Adcock Ingram climbed 4.86% to R58.20 after the pharmaceutical company said on Wednesday that its total dividend increased 16% to R2 in the year to end-June. This was its biggest one-day gain in about 18 months.
Omnia jumped 16.58% to R41.20 after the chemical and fertiliser maker, on Tuesday, priced its R2bn capital-raising, through an offer of 100-million ordinary shares, at R20 per rights offer share.
Zeder gained 2.04% to R4.50 after the company said on Wednesday that it had agreed to buy a 40% stake in East African Seed Company.
Statistics SA is scheduled to publish the producer price index for July on Thursday. A deceleration to 5.3% year-on-year, from 5.8% in June, is the consensus according to a Bloomberg poll.
Source: businesslive.co.za
