Retailer Shoprite and miners help lift JSE

The JSE was higher on Tuesday morning, lifted by miners and retailer Shoprite, which surged despite reporting poor sales growth for the year to end-June.

At 9.32am Shoprite was up 10.7% to R161.18, having said earlier that headline earnings per share for the year fell by 14.3%-20.3%, as labour costs rose due to new legislation and on higher rent and electricity costs.

The all share was up 0.21% to 58,158.7 points and the top 40 was 0.15% higher. Gold miners had added 2.02% and platinums 1.26%. Food and drug retailers had jumped 3.13%.

Gold and platinum were flat at $1,425.25/oz and $880.46/oz, respectively, while Brent crude had risen 0.34% to $64.09 a barrel.

Rand hedge British American Tobacco was down 1.8% to R532.01.

Sibanye Gold was up 3.31% to R19.34 and Harmony 3.55% to R36.50.

Trade on international markets is expected to remain cautious ahead of the US Federal Reserve’s policy announcement on Wednesday, with markets expecting the world’s most influential central bank to cut interest rates by 25 basis points.

Some focus is also on US-China trade talks, which get under way in Shanghai on Tuesday. Locally, employment data for the second quarter is due at 11.30am.

A falling pound is also catching some attention, with markets now increasingly pricing in a hard Brexit.

“Interestingly, the weakness in the pound is a reflection of the fact that UK Prime Minister Boris Johnson’s plan is working,” Oanda analyst Craig Erlam said in a note.

“He wants his no-deal threats to be taken seriously by the EU in the hope that it forces them to re-engage on the backstop. Clearly he has traders convinced.”

The backstop refers to an agreement reached between the EU and UK to avoid a border controls between Ireland and Northern Ireland, something that has been a key sticking point in negotiations.

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